Ontario Securities Commission Bulletin
Issue 49/10 - March 12, 2026
Ont. Sec. Bull. Issue 49/10
• Ontario Securities Commission et al.
• Go-To Developments Holdings Inc. et al. -- ss. 127(1), 127.1
• Peter Michael Deeb et al. -- ss. 8, 21.7
• Ontario Securities Commission and Radhakrishna Namburi -- ss. 127(1), 127.1
• Go-To Developments Holdings Inc. et al. -- ss. 127(1), 127.1
• Ontario Securities Commission and Radhakrishna Namburi -- ss. 127(1), 127.1
• One Bullion Limited (formerly, Imperial Ginseng Products Ltd.) -- s. 1(11)(b)
• Algonquin Capital Corporation and The Top Funds
• Fidelity Investments Canada ULC
• RBC Dominion Securities Inc.
• Temporary, Permanent & Rescinding Issuer Cease Trading Orders
• Temporary, Permanent & Rescinding Management Cease Trading Orders
• Amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure
• Amendments to National Instrument 81-102 Investment Funds
• Amendments to National Instrument 81-106 Investment Fund Continuous Disclosure
• Amendments to National Instrument 81-107 Independent Review Committee for Investment Funds
• Change to Commentary in National Instrument 81-107 Independent Review Committee for Investment Funds
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Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
March 6, 2026
TORONTO -- A motion hearing in the above-named matter is scheduled to be heard on March 13, 2026 at 10:00 a.m. by videoconference.
Members of the public may observe the hearing by videoconference, by selecting the "View by Zoom" link on the Tribunal's hearing schedule, at capitalmarketstribunal.ca/en/hearing-schedule.
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Go-To Developments Holdings Inc. et al.
FOR IMMEDIATE RELEASE
March 9, 2026
TORONTO -- The Tribunal issued its Reasons and Decision and an Order in the above-named matter.
A copy of the Reasons and Decision and Order both dated March 6, 2026 are available at capitalmarketstribunal.ca.
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FOR IMMEDIATE RELEASE
March 9, 2026
TORONTO -- The Tribunal issued an Order in the above-named matter.
A copy of the Order dated March 9, 2026 is available at capitalmarketstribunal.ca.
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Ontario Securities Commission and Radhakrishna Namburi
FOR IMMEDIATE RELEASE
March 10, 2026
TORONTO -- The Tribunal issued its Reasons and Decision and an Order in the above-named matter.
A copy of the Reasons and Decision and Order both dated March 9, 2026 are available at capitalmarketstribunal.ca.
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Go-To Developments Holdings Inc. et al. -- ss. 127(1), 127.1
File No. 2022-8
Adjudicators: |
M. Cecilia Williams (chair of the panel) |
Geoffrey D. Creighton |
|
Cathy Singer |
March 6, 2026
(Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5)
WHEREAS on December 10, 2025, the Capital Markets Tribunal held a hearing at 20 Queen Street West, Toronto, Ontario, to consider the sanctions and costs that the Tribunal should impose as a result of the findings in the Reasons and Decision on the Merits issued on May 6, 2025;
ON READING the materials filed by the Ontario Securities Commission and Oscar Furtado, and on hearing the submissions of the representatives for the Commission, Furtado and KSV Restructuring Inc. (the Receiver) in its capacity as receiver and manager of Go-To Developments Holdings Inc., Go-To Spadina Adelaide Square Inc. (Adelaide GP) and Furtado Holdings Inc.;
IT IS ORDERED THAT:
1. pursuant to paragraphs 2 and 2.1 of subsection 127(1) of the Securities Act (the Act):
a. trading in securities of Go-To Developments Holdings Inc., Adelaide GP, and Furtado Holdings Inc. shall cease for a period of 10 years, except for trades effected by the Receiver;
b. Go-To Developments Holdings Inc., Adelaide GP, and Furtado Holdings Inc. are prohibited for a period of 10 years from trading in any securities or derivatives, or acquiring any securities, except for any trades or acquisitions effected by the Receiver; and
c. Furtado is prohibited for a period of 10 years from trading in any securities or derivatives, or acquiring any securities, except that he may trade securities or derivatives, and acquire securities, in a Registered Retirement Savings Plan, Registered Retirement Income Fund, Registered Education Savings Plan, Registered Disability Savings Plan or Tax-Free Savings Account (as those terms are defined in the Income Tax Act, RSC, 1985, c 1 (5th Supp)), of which he, his spouse or his children are the sole legal and beneficial owners, through a registered dealer in Canada to whom he has given a copy of this order;
2. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to the respondents for a period of 10 years;
3. pursuant to paragraphs 7 and 8.1 of subsection 127(1) of the Act, Furtado shall resign any positions that he holds as a director or officer of any issuer or registrant;
4. pursuant to paragraphs 8 and 8.2 of subsection 127(1) of the Act, Furtado is prohibited from becoming or acting as a director or officer of any issuer or registrant for a period of 10 years;
5. pursuant to paragraph 8.5 of subsection 127(1) of the Act, the respondents are prohibited from becoming or acting as a registrant or as a promoter for a period of 10 years;
6. pursuant to paragraph 9 of subsection 127(1) of the Act:
a. Furtado shall pay an administrative penalty in the amount of $1,000,000 to the Commission;
b. Go-To Developments Holdings Inc. shall pay an administrative penalty in the amount of $200,000 to the Commission;
c. Adelaide GP shall pay an administrative penalty in the amount of $200,000 to the Commission; and
d. Furtado Holdings Inc. shall pay an administrative penalty in the amount of $200,000 to the Commission;
7. pursuant to paragraph 10 of subsection 127(1) of the Act, the respondents shall, jointly and severally, disgorge to the Commission $22,200,000; and
8. pursuant to section 127.1 of the Act, the respondents shall, jointly and severally, pay to the Commission $638,613.85 for costs of the investigation and proceeding.
Peter Michael Deeb et al. -- ss. 8, 21.7
BETWEEN:
File No. 2026-10
Adjudicators: |
James Douglas (chair of the panel) |
Judith Robertson |
March 9, 2026
Sections 8 and 21.7 of the Securities Act, RSO 1990, c S.5
WHEREAS on March 6, 2026, the Capital Markets Tribunal held a hearing by videoconference regarding the application dated February 26, 2026, made by Peter Michael Deeb, to review decisions of the Canadian Investment Regulatory Organization (CIRO) dated April 14, 2025 and February 3, 2026 (the CIRO Decisions), and the motion brought by Deeb for a stay of the CIRO Decisions pending the disposition of the application (the Stay Motion);
ON HEARING the submissions of the representatives for Deeb, CIRO, and the Ontario Securities Commission, and on being advised by the parties following the hearing of their agreement to the timeline set out in paragraph 5 of this order;
IT IS ORDERED THAT:
1. the CIRO Decisions are stayed pending the disposition of the Stay Motion, or further order of the Tribunal;
2. the hearing of the Stay Motion is scheduled for April 6, 2026, at 10:00 a.m., at the Capital Markets Tribunal located at 20 Queen Street West, 17th Floor, Toronto, Ontario, or as may be agreed to by the parties and set by the Governance & Tribunal Secretariat;
3. the parties shall adhere to the following timeline for the delivery of materials for the Stay Motion:
a. Deeb shall serve and file his motion record and written submissions on the Stay Motion by 4:30 p.m. on March 10, 2026;
b. CIRO shall serve and file responding written submissions on the Stay Motion by 4:30 p.m. on March 25, 2026;
c. the Commission shall serve and file responding written submissions on the Stay Motion by 4:30 p.m. on March 27, 2026; and
d. Deeb shall serve and file reply written submissions on the Stay Motion, if any, by 4:30 p.m. on March 30, 2026;
4. the hearing of the merits of the application shall commence on October 1, 2026, and continue on October 2, 2026, commencing at 10:00 a.m. on each hearing day, at the Capital Markets Tribunal located at 20 Queen Street West, 17th Floor, Toronto, Ontario, or as may be agreed to by the parties and set by the Governance & Tribunal Secretariat;
5. the parties shall adhere to the following timeline for the delivery of materials for the hearing of the merits of the application:
a. Deeb shall serve and file the record of the original proceeding by 4:30 p.m. on March 31, 2026;
b. any party that seeks permission to rely on witness testimony, or on documents or things not included in the record of the original proceeding, at the merits hearing, or seeks other interlocutory relief, shall serve and file a motion and motion record by 4:30 p.m. on April 17, 2026;
c. Deeb shall serve and file written submissions on the merits by 4:30 p.m. on May 29, 2026;
d. CIRO shall serve and file responding written submissions on the merits by 4:30 p.m. on July 10, 2026;
e. the Commission shall serve and file responding written submissions on the merits by 4:30 p.m. on July 28, 2026; and
f. Deeb shall serve and file reply written submissions on the merits, if any, by 4:30 p.m. on August 11, 2026;
6. the timelines in paragraph 5 of this order may be adjusted if agreed to by all parties without the need for a further order from the Tribunal provided that the parties inform the Tribunal of any agreed changes and provided that all materials are filed with the Tribunal by 4:30 p.m. on August 31, 2026; and
7. a case management hearing is scheduled for September 14, 2026, at 10:00 a.m., by videoconference, or as may be agreed to by the parties and set by the Governance & Tribunal Secretariat.
Ontario Securities Commission and Radhakrishna Namburi -- ss. 127(1), 127.1
BETWEEN:
File No. 2025-24
Adjudicator: |
Dale R. Ponder |
March 9, 2026
(Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5)
WHEREAS the Capital Markets Tribunal held a combined merits, sanctions and costs hearing in writing to consider whether to make findings against, and impose sanctions and costs on, Radhakrishna Namburi;
AND WHEREAS the Tribunal made findings against Namburi in its Reasons and Decision issued on March 9, 2026;
ON READING the materials filed by the Ontario Securities Commission, and Namburi having not filed any materials, although having been properly served;
IT IS ORDERED THAT:
1. Namburi shall, on or before April 9, 2026, resign any positions he holds as a director or officer of any issuer, pursuant to paragraph 7 of s. 127(1) of the Securities Act (the Act);
2. Namburi is prohibited from becoming or acting as a director or officer of any issuer until April 7, 2037, pursuant to paragraph 8 of s. 127(1) of the Act;
3. Namburi shall pay an administrative penalty of $7,500 for his failure to comply with Ontario securities law, pursuant to paragraph 9 of s. 127(1) of the Act; and
4. Namburi shall pay to the Commission $4,328.75 for costs of the investigation and hearing, pursuant to s. 127.1 of the Act.
Go-To Developments Holdings Inc. et al. -- ss. 127(1), 127.1
Citation: Go-To Developments Holdings Inc (Re), 2026 ONCMT 12
Date: 2026-03-06
File No. 2022-8
(Subsection 127(1) and s. 127.1 of the Securities Act, RSO 1990, c S.5)
Adjudicators: |
M. Cecilia Williams (chair of the panel) |
|
Geoffrey D. Creighton |
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Cathy Singer |
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Hearing: |
December 10, 2025 |
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Appearances: |
Erin Hoult |
For the Ontario Securities Commission |
Emma Seip |
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Ian Aversa |
For Go-To Developments Holdings Inc., Go-To Spadina Adelaide Square Inc., Furtado Holdings Inc., for the Receiver, KSV Restructuring Inc. |
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Jeremy Nemers |
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Calvin Horsten |
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Melissa MacKewn |
For Oscar Furtado |
|
Dana Carson |
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Maxim Tchoudnovski |
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[1] These are the reasons for the sanctions and costs we impose on Go-To Developments Holdings Inc., Go-To Spadina Adelaide Square Inc. (Adelaide GP), Furtado Holdings Inc., (collectively, the Corporate Respondents), and their sole director and officer Oscar Furtado. For the reasons set out below, we conclude it would be in the public interest to order that:
a. the respondents be subject to market participation bans for a period of 10 years, the details of which are more fully explained below;
b. the respondents jointly and severally disgorge to the Commission $22,200,000;
c. Furtado pay an administrative penalty of $750,000 with respect to his fraudulent misconduct and $250,000 with respect to his misleading the Commission;
d. each of the Corporate Respondents pay an administrative penalty of $200,000; and
e. the respondents jointly and severally pay $638,613.85 of the Commission's costs connected with the investigation and this proceeding.
[2] In our decision on the merits dated May 6, 2025{1} (the Merits Decision), we found that:
a. The Corporate Respondents and Oscar Furtado perpetrated a securities fraud in breach of the Securities Act{2} (the Act) in five ways: three of those ways defrauded investors in the Go-To Spadina Adelaide Square LP (Adelaide LP), one defrauded investors in two other Go-To Developments Holdings' projects, and the final one was a fraud on the Adelaide LP itself; and
b. Furtado made misleading statements to the Commission during its investigation.
[3] We provide a brief recap of the facts from the Merits Decision that are relevant to our analysis of the appropriate sanctions and costs in this matter.
[4] The Corporate Respondents are related Ontario corporations. Go-To Developments Holdings is a real estate development company which operates through its corporate subsidiaries and project-specific limited partnerships (each, a limited partnership). The Adelaide GP is a wholly owned subsidiary of Go-To Developments Holdings incorporated to serve as the general partner of the Adelaide LP. Furtado Holdings owns Go-To Developments Holdings and is Furtado's personal and family holding company.
[5] One of the projects undertaken by Go-To Developments Holdings was the proposed acquisition and development of a land assembly of two properties in Toronto, 355 Adelaide Street West and 46 Charlotte Street (collectively the Adelaide Properties). The Adelaide LP was formed to pursue this project (the Adelaide Project), and the Adelaide GP was the general partner of this limited partnership.
[6] In the capitalization and operation of the Adelaide LP, Furtado worked with Alfredo Malanca. In addition to his role in other corporate entities, Malanca was the representative or agent of Adelaide Square Developments Inc. Furtado knew that Malanca or a company he represented held agreements to purchase the Adelaide Properties. Furtado and Malanca contemplated that the Adelaide LP would purchase the Adelaide Properties from Adelaide Square Developments for an amount that was significantly more than what was owed to the existing owners of the properties. That difference was referred to by Furtado and Malanca as the "lift".
[7] Hans Jain, an experienced real estate developer, became involved in discussions concerning the Adelaide Properties, including discussions with Furtado and Malanca about the "lift". Jain indirectly invested $2 million in the Adelaide LP.
[8] The purchase of the Adelaide Properties, as it finally occurred with the involvement of outside investors, included an assignment fee of $20.95 million paid to Adelaide Square Developments by Adelaide LP, representing the "lift" between the price paid by Adelaide Square Developments to the original owners and the price paid by the Adelaide LP to Adelaide Square Developments. Furtado failed to disclose to investors that he intended to receive, and did receive, a personal benefit (his share of the "lift").
[9] To secure the closing, Furtado and Malanca obtained an investment in the Adelaide LP of $16.8 million from Anthony Marek, who viewed his investment in units of the Adelaide LP as a "day loan". Because Marek required immediate payout of his investment with a large fee on closing of the purchase, the assignment fee to be paid by Adelaide LP to Adelaide Square Developments was, in the first instance, directed to Marek. The assignment fee payment owing to Adelaide Square Developments was replaced by a demand loan from the Adelaide LP to Adelaide Square Developments (the Demand Loan). In order to repay Marek's investment and fee, Furtado redeemed Marek's limited partnerships units contrary to representations made to investors. We concluded in the Merits Decision that this fraud against the Adelaide LP investors was also a fraud against the Adelaide LP itself.
[10] Shortly after the Adelaide LP's purchase of the properties, Adelaide Square Developments issued new shares to Furtado Holdings and one of Malanca's companies and paid each of them approximately $388,000 in the form of dividends. By October 2019, Furtado had secured a further $12 million investment from Marek. He did so by giving Marek materials that contained material misstatements concerning the capital structure of the investment.
[11] Furtado then caused the Adelaide LP to use Marek's further investment to pay out $12 million of the Adelaide Square Developments Demand Loan. Adelaide Square Developments then used that receipt to pay dividends, in the amount of $6 million each, to Furtado Holdings and Malanca's company. In the Merits Decision we concluded that Furtado misled the Commission during its investigation about the dividends paid to Furtado Holdings.
[12] During this same period, Furtado used the assets of two other Go-To Developments Holdings' limited partnerships, Elfrida LP and Eagle Valley LP, to secure obligations of the Adelaide Project and Adelaide LP, contrary to representations made to investors in those other limited partnerships.
[13] As a preliminary matter in our analysis, we have some general comments about the role of the Receiver in the sanctions hearing and how we have decided to treat the Corporate Respondents, which are all in Receivership, in our sanctions and costs decisions.
[14] The Corporate Respondents and other Go-To Developments Holdings' entities are currently under Receivership. Various civil actions have been commenced involving the Receiver and the respondents. The Commission has filed a contingent claim related to this proceeding in the Receivership, to seek to enforce any monetary orders that may flow from this decision.
[15] The Receiver did not give evidence in this hearing. Nor, as has been done on occasion by other receivers in other matters before the Tribunal, has the Receiver taken a position about what impact any sanctions, including a disgorgement order, might have on the ability of investors who have suffered losses to recoup any amounts through the Receivership.
[16] The Receiver has not asked us to exclude the Corporate Respondents from any of the sanctions or costs the Commission is seeking. There is no evidence before us about the impact, if any, of sanctions or costs on the Receivership or on the ability of investors to recoup any losses through the Receivership. We therefore include the Corporate Respondents in our sanctions and costs orders without regard to the impact on the Receivership.
[17] The Tribunal may impose sanctions under s. 127(1) of the Act where it finds it to be in the public interest to do so. The Tribunal's exercise of that jurisdiction must be consistent with the purposes of the Act, which include protecting investors from unfair, improper and fraudulent practices, and fostering fair and efficient capital markets and confidence in them.
[18] Sanctions are protective and are intended to prevent future harm to investors and to the capital markets.{3}
[19] The Commission seeks the following sanctions and costs against the respondents:
a. permanent market bans for all respondents, including director and officer bans for Furtado;
b. administrative penalties:
i. Furtado: $1.3 million;
ii. Go-To Developments Holdings: $750,000;
iii. Furtado Holdings: $750,000; and
iv. Adelaide GP: $750,000;
c. disgorgement to be paid by all respondents, jointly and severally, in the amount of $28,588,087.33; and
d. costs of the investigation and hearing to be paid by all respondents, jointly and severally, in the amount of $1,137,416.85.
[20] The Tribunal may consider a variety of factors in deciding the appropriate sanctions.{4} The applicability and importance of these factors will vary case-by-case.{5} The sanctioning factors most relevant in this case are, as discussed below, the seriousness of the misconduct, the size of the contravention, whether the misconduct was isolated, whether the respondents benefited from the misconduct, any mitigating factors and specific and general deterrence.
[21] We consider first the seriousness of the fraudulent misconduct. The Tribunal has recognized that fraud is one of the most egregious violations of securities law, and sanctions must reflect that.{6} Fraud causes direct harm to investors and undermines confidence in the capital markets.{7}
[22] In assessing the seriousness of the respondents' misconduct, the Commission asks us to consider the following:
a. the respondents' dishonesty deprived investors of information needed to properly assess the risks and make fully informed decisions;
b. the respondents misled investors about the bargain that they would be entering, and/or acted contrary to the bargain promised in several ways, including:
i. failing to disclose to Adelaide LP investors, except for Jain, that Furtado stood to benefit from the acquisition of the Adelaide Properties and was in a conflict of interest as a fiduciary of the Adelaide LP;
ii. redeeming $16.8 million of Marek's units contrary to representations to other investors that the investments were illiquid and that all investors would receive a pro rata return on their investment;
iii. understating the Adelaide LP's debt and overstating its equity in promotional materials provided to Marek to solicit further investment; and
iv. registering charges on the Eagle Valley and Elfrida properties, contrary to representations to investors in those LPs; and
c. the respondents' actions to ultimately obtain personal benefits from the acquisition of the Adelaide Properties amounted to fraud on the Adelaide LP itself.
[23] The Commission also asks us to consider Furtado's mental state at the relevant time.{8} Among other things, the Commission submits that Furtado intended to personally benefit from the purchase of the Adelaide Properties; he knowingly concealed that information from investors. Such intentional misleading of investors heightens the seriousness of his misconduct, the Commission submits.
[24] Furtado did not make specific submissions relating to each of the sanctioning factors. Furtado submits that the Tribunal regularly states in decisions that certain conduct may be less serious than other misconduct, but for the purposes of specific and general deterrence a message must still be sent through sanctions. The question that Furtado asks us to consider is where does the fraud at issue here lie on the spectrum of misconduct and what type of message is needed in response?
[25] In deciding what's necessary to advance the principles of sanctioning, Furtado asks the Tribunal to consider the full context of the respondents' conduct, including the following mitigating factors:
a. the Adelaide Project was real,
b. the capital raising conduct was not registrable,
c. the valuations of the Adelaide Properties supported the purchase price,
d. Furtado gave personal guarantees without receiving fees and at significant personal risk, and
e. Furtado did not abscond with a quick profit when faced with the Receivership but rather stayed and tried to find purchasers for the properties in the Receivership.
[26] Fraud is an egregious offence. The respondents were found to have committed five frauds. They misled the investing public, who invested in the Adelaide LP without the benefit of full disclosure (about Furtado's intended personal benefit, the early redemption of Marek's LP units, and the resulting change to the project's debt/equity ratio) that would have allowed them to fully assess the risks of the investment. Furtado also defrauded investors in the Eagle Valley and Elfrida LPs by leveraging their properties to secure obligations of the Adelaide LP. This is very serious misconduct warranting significant sanctions.
[27] It is, however, not the most egregious of frauds that have come before this Tribunal. The respondents were conducting a real business; the Adelaide Project was a real endeavour unlike other frauds where the entire operation is a scam. Unlike other frauds, the respondents did not breach other aspects of the Act while engaging in their capital raising for the Adelaide Project. There was no alleged breach of the Act's prospectus requirements. We concluded in the Merits Decision that their actions were not registrable. We take due note of these mitigating factors in our sanctions' decisions below.
[28] We do not give any consideration to the other factors Furtado raised. Regardless of what the purported value of the Adelaide Properties was, it does not detract from the conclusions that the respondents failed to disclose material information and misled investors about the nature of the bargain they were getting.
[29] To determine the level of activity in the marketplace, the Tribunal typically considers the duration of the misconduct, the number of individual breaches, the number of investors impacted, and the quantum of money involved.{9}
[30] There were five frauds. With respect to the Adelaide LP, $42 million was raised from 23 investors.{10} 20 investors invested $4.25 million in the Eagle Valley LP and 11 investors placed $10.6 million in the Elfrida LP.{11} The failure to disclose Furtado's benefit (the fact that he intended to receive it and subsequently that he had received it) lasted throughout the capital raising period for the Adelaide LP (namely between February 15, 2019 and June 18, 2020).
[31] As indicated above, no attempt was made by the respondents to disclose Furtado's personal benefit throughout the capital raising period. The Merits Decision concluded the respondents committed the additional fraudulent acts during the same period.
[32] We agree with the Commission's submissions that the respondents benefitted, and/or stood to benefit from their misconduct. Among other things, the fraud contributed to the acquisition of the Adelaide Properties by the Adelaide LP, from which the Adelaide GP and Go-To Developments Holdings (as the Adelaide GP's parent company) stood to benefit. Furtado Holdings, as the parent of Go-To Developments Holdings, likewise stood to benefit from any success of the Adelaide LP, as did Furtado.
[33] In addition, Furtado Holdings directly received shares in Adelaide Square Developments, arising from the Adelaide LP's purchase of the Adelaide Properties. Those shares gave rise to the approximately $388,000.00 and $6 million in dividend payments to Furtado Holdings. Furtado used the funds received in a variety of ways, including for personal uses and to meet obligations for other Go-To LPs.
[34] The Commission submits that we should consider Furtado's experience as an aggravating factor. Furtado is a Chartered Accountant. He had over 30 years of professional experience, including with the Royal Bank of Canada and for a brief period with the Commission. The Commission also submits that Furtado specifically highlighted his experience in promotional materials for the Go-To projects; he touted his experience to gain investors' trust and then failed to uphold the high standards of conduct that would be expected of him.
[35] We conclude that Furtado's knowledge and experience do weigh against him. Rather than using his skill to benefit investors who placed their trust in him, he knowingly acted contrary to their best interests.
[36] The Commission submits that there are no mitigating factors for us to consider. As discussed above in our analysis of the seriousness of the misconduct, we do take into account several mitigating factors raised by Furtado.
[37] Significant sanctions are warranted in this instance as specific deterrence for Furtado who, in addition to abusing the trust of the investors in the Adelaide, Eagle Valley and Elfrida LPs, also misled the Commission during the investigation. In addition, significant sanctions will demonstrate to like-minded individuals that defrauding investors will not be tolerated.
[38] The Commission seeks comprehensive and permanent market participation bans for all the respondents, including director and officer bans for Furtado. The only exceptions proposed by the Commission are, first, to accommodate trades by the Receiver of the Corporate Respondents. Second, in the case of the trading prohibition against Furtado, the Commission proposes a limited carve-out for registered plans, available only after the monetary sanctions and costs owing pursuant to this decision are fully paid.
[39] Furtado submits that a permanent ban is excessive in these circumstances and that a 10-year ban should be the maximum considered. Furtado also submits that the proposed conditional carve-out from his trading prohibition, in respect of registered savings, is meaningless in the context of the monetary sanctions and costs sought by the Commission.
[40] For the reasons that follow, we determine that comprehensive, 10-year market participation bans for all respondents are appropriate, with an exception to accommodate trades by the Receiver of the Corporate Respondents. We also determine that the trading ban for Furtado shall be subject to a carve-out for trading in registered plans, which is not conditional on prior payment of the monetary sanctions and costs owing pursuant to this decision.
[41] A finding of fraud typically calls for market participation bans.{12} However, the duration and nature of the prohibitions and restrictions depend on the particular facts of each case.{13} There are many cases of fraud for which permanent and comprehensive bans are appropriate,{14} and others where the Tribunal has concluded that less onerous bans will fulfil the sanctioning principles.{15}
[42] We have explained above our conclusion that the frauds in this case are very serious but are not the most egregious of the cases which come before the Tribunal. We accordingly examine where this case should fall on the spectrum of market participation bans.
[43] The nature of the fraud is a relevant sanctioning factor for that consideration. Although we found the respondents engaged in fraud in various ways, none of them were found to be in relation to trading in public capital markets. The respondents are not, and have never been, registrants under Ontario securities laws, and in the Merits Decision we found that they were not required to be registered to sell the limited partnership units in issue in this case.
[44] Put another way, it is not a necessary conclusion from the findings of fraud in this case, that the respondents could never again be trusted to participate in the capital markets in any way. We consider that in this case the respondents' blameworthy conduct was not in respect to trading in public capital markets. Therefore, shorter trading bans are warranted.
[45] In the context of the disgorgement and administrative monetary penalties which we are imposing elsewhere in these reasons, together with a costs order, we conclude that comprehensive market participation bans for a period of 10 years are appropriate in this case. Those bans will be subject, in the case of the Corporate Respondents, to a limited exception for trades by the Receiver.
[46] We now turn to the proposed carve-out from the trading ban for Furtado.
[47] It is common to see carve-outs from trading bans imposed by the Tribunal, to permit a respondent to trade, through a registered dealer, in registered plans for themselves or immediate family. In earlier cases, such carve-outs were provided without any conditions related to payment of monetary penalties.{16}
[48] Over time, however, we have seen the practice change with no clear explanation of why it started and why it was being changed. The carve-outs have sometimes been permitted without conditions related to payment of monetary sanctions. In other cases, payment of outstanding monetary sanctions, and costs, has been required before any carve-outs become effective. In Borealis International Inc (Re), for example, the Tribunal distinguished between several respondents based on its assessment of their respective risks to public markets and the nature of their misconduct to impose a payment condition on some carve-outs but not on others.{17}
[49] In recent years, the Commission has frequently sought to obtain, on any carve-out, the condition that all monetary amounts owing from sanctions and costs orders have been paid.{18}
[50] Such a condition is a tool which is available to the Tribunal in crafting appropriate sanctions. In certain recent cases, however, the Tribunal has also recognized that, depending on the circumstances of the case and the particular respondent, such a condition could be punitive, rather than remedial.{19}
[51] In those cases, the Tribunal provided the carve-out with the condition sought by the Commission but noted that the respondents had not objected to the condition. In VRK Forex & Investments Inc (Re), the panel stated that, "we leave it to panels in future cases to determine whether a similar term is in the public interest where it is requested by [the Commission] but contested by a respondent".{20}
[52] Furtado objected to the condition on the proposed carve-out to his trading ban. He submitted that it rendered "the purported carve-out" of "no value", in view of the monetary sanctions and costs sought by the Commission.
[53] To inform this determination, we must consider the purpose of the condition to the carve-out, and the purpose of the carve-out itself. Providing a carve-out, or a carve-out subject to a condition, is an exercise of the Tribunal's discretion under its general powers pursuant to s. 127(1) of the Act to make orders in the public interest.
[54] The parties did not direct us to any case which explains the rationale for the payment condition. The Commission submits that it was to create an incentive for Furtado to pay the amounts owing. On principle, the Commission submits that respondents should satisfy their obligations and comply with orders of the Tribunal before they are entitled to the benefits of the carve-out.
[55] The purpose of such a carve-out has been stated in cases, briefly, as addressing the public policy goal of allowing financial planning for retirement.{21} Put another way, allowing a limited carve-out may mitigate the risk of a respondent becoming "a charge on society".{22}
[56] These purposes for a carve-out, and for a condition on the carve-out, both require the panel to consider the totality of the circumstances of the case and the respondent before it. They must be weighed in the context of the other sanctions and costs ordered in these reasons.
[57] Furtado is 63 years of age, and has several medical issues, some of which have impacted the conduct of this proceeding. All the Go-To corporations, including the Corporate Respondents, are in receivership.
[58] As noted above, Furtado's misconduct did not involve trading securities on a marketplace, nor has he ever been a registrant. There is no evidence or submission that suggests that Furtado's registered savings arose in whole or part because of the misconduct we have found. However, subject to a trading ban and without an effective carve-out, Furtado would be unable to manage those registered savings.
[59] Furtado's misconduct was serious, and has resulted in serious monetary sanctions, and costs, in an aggregate amount of more than $23 million. The sanction amounts are appropriately large and send an important message of both specific and general deterrence.
[60] Realistically, however, requiring payment in full of those amounts, and costs, before allowing access to registered savings would not, in this case, be appropriate. In reaching this conclusion we have considered all the facts summarized in the preceding paragraphs and have taken a global view of all the sanctions and costs we have imposed on Furtado.{23}
[61] Accordingly, we order that the trading ban in respect of Furtado be subject to a carve-out for registered plans, which is not conditional upon prior payment of the monetary amounts owing pursuant to this decision.
[62] The Commission requests, pursuant to paragraph 10 of s. 127(1) of the Act, that the respondents be ordered to disgorge, on a joint and several basis, the amounts they obtained as a result of their breaches of Ontario securities law.
[63] The Commission submits that the respondents should be required to disgorge, jointly and severally, $28,588,087.33. For the reasons below we order disgorgement on a joint and several basis of $22,200,000.
[64] Subsection 127(1) of the Act permits the Tribunal to order disgorgement of any amounts obtained by non-compliance with Ontario securities law.
[65] The purpose of a disgorgement order is to ensure that wrongdoers do not benefit from their breach of Ontario securities law, to deter others from engaging in similar conduct,{24} and to restore confidence in the capital markets.{25} As such, the focus in ordering disgorgement is not on whether the fraudster pocketed the money, but rather on the fact that the money was improperly diverted at all.{26}
[66] The Tribunal considers a non-exhaustive list of factors when deciding if a disgorgement order is appropriate and the quantum, including:
a. whether amounts were obtained as a result of non-compliance with Ontario securities law;
b. the seriousness of the misconduct and whether that misconduct caused serious harm, whether directly to original investors or otherwise;
c. whether the amount obtained as a result of non-compliance is reasonably ascertainable;
d. whether those who suffered losses are likely to obtain redress; and
e. the deterrent effect of the disgorgement order on the respondents and other market participants.{27}
[67] We have organized our analysis around these five factors. We consider first whether there were amounts obtained as a result of non-compliance with Ontario securities law.
[68] It is a well-established principle that the term "amounts obtained" is not limited to the amounts personally obtained by the respondents, directly or indirectly. It may include any amounts obtained as a result of non-compliance.{28} Deductions for costs or expenses incurred by a respondent are not required.{29}
[69] The Tribunal has also held that individual respondents cannot shelter themselves from administrative sanctions by acting through corporations that they control or direct.{30} An individual respondent who is the directing mind of a corporate respondent can, therefore, be held jointly and severally liable for a disgorgement order made against that corporate respondent.{31}
[70] The essence of the issue before us is whether and in what amount there were amounts obtained as a result of the respondents' non-compliance with Ontario securities law. We conclude that the amount obtained as a result of the respondents' fraudulent activities was the $42 million raised from investors in the Adelaide LP. Our analysis supporting that conclusion follows directly below. The amount we order to be disgorged is a portion of the $42 million based on appropriate adjustments set out in our analysis below of the third factor, whether the amount to be disgorged is reasonably ascertainable.
[71] In the Merits Decision, the Tribunal found the respondents had committed five frauds. For the purposes of arriving at that conclusion, the Tribunal had assessed each of the frauds separately. To determine whether a disgorgement order is appropriate, we consider the frauds together as a whole. We exclude from our consideration the third fraud the respondents were found to have committed, where the respondents used the assets of two other Go-To Developments Holdings' limited partnerships to secure the obligations of the Adelaide LP. We do so because, as the Commission concedes, there are no reasonably ascertainable amounts obtained from that fraud.
[72] The Merits Decision concluded that Furtado intended to obtain a personal benefit from the purchase of the Adelaide Properties. The four frauds the respondents were found to have committed were:
a. failure to disclose the information about the "lift" and Furtado's intention to personally benefit from it (Fraud #1);
b. the early redemption of Marek's $16.8 million investment contrary to the representations to all investors that their investment was illiquid and that payments would be made to all investors on a pro rata basis (Fraud #2). The redemption was effected by directing the assignment fee to be paid by the Adelaide LP on purchase of the Adelaide Properties, representing the "lift", to Adelaide Square Developments. The assignment fee was replaced by the Demand Loan which Furtado caused the Adelaide LP to enter into with Adelaide Square Developments, thereby converting a large portion of the equity in the Adelaide Project into debt;
c. Furtado's fraudulent solicitation of a further $12 million from Marek (Fraud #4), which Furtado then caused the Adelaide LP to pay Adelaide Square Developments to pay down the Demand Loan. Adelaide Square Developments then paid the $6 million dividend to Furtado Holdings; and
d. the fraudulent activity in Fraud #2 was also found to be a fraud against the Adelaide LP (Fraud #5).
[73] The Divisional Court in Pushka v Ontario Securities Commission upheld the Tribunal's decision to order disgorgement. The Court stated: "The [Tribunal] reasoned that the purpose of the impugned transactions was to generate long-term fee income of just the kind received: receipt of these amounts was the intended and foreseeable result of the wrongful conduct. This reasoning is persuasive and lies at the heart of the [Tribunal's] expertise."{32}
[74] Furtado obtaining the personal benefit, in the form of $6,388,087.33 in dividends, was similarly the intended and foreseeable result of the misconduct, consisting of the failure to disclose, the early redemption of Marek's initial investment, and the further solicitation of $12 million from Marek.
[75] In the Merits Decision the Tribunal found that:
a. The failure to disclose the "lift" and Furtado's intended personal benefit affected all the initial investors who were exposed to the risk that the purchase of the Adelaide Properties "had not been, and would not be, pursued solely in best interests of the Adelaide LP". This resulted in a pecuniary risk for which the investors had not bargained.{33}
b. The early redemption of Marek's initial investment affected all investors as it was "contrary to the bargain that had been placed before investors, that all investors were in it together until the project came to fruition, at which point investors would be paid out on a pro rata basis".{34} Also,"[t]he capital structure of the Adelaide LP was materially altered by the Adelaide LP entering into the Demand Loan using most of the proceeds to pay Marek on redemption of his units, substituting debt for equity. This early, material payment to Marek placed the pecuniary interests of the other investors at risk".{35}
c. The information Furtado provided to Marek when solicitating the further $12 million "materially understated the Adelaide LP's debt and overstated its equity". While Marek might not have relied, in fact, on the information provided to him, as the Merits Decision concluded, he was entitled to rely on the information provided to him and it reflected a situation materially different from that for which he bargained. The funds from this fraudulent solicitation were used to pay the $6 million intended personal benefit to Furtado.{36}
[76] Furtado submits that the Merits Decision did not conclude that the dividend payments Furtado received were obtained by the fraud. Rather, the fraudulent conduct found was the imposition of an undisclosed risk on investors that Furtado might not pursue the purchase of the Adelaide Properties solely in the best interests of the Adelaide LP because he stood to receive a personal benefit. As we've indicated earlier in these reasons, we reject Furtado's narrow view of the misconduct in question and adopt the view that the frauds considered together as a whole created the risk that the investment differed significantly from the bargain investors had agreed to.
[77] A disgorgement order may be appropriate even where there is no provable or direct loss to investors.{37} Even in circumstances where investors did not suffer direct financial losses, exposure of investors to substantial risks is sufficient to warrant a disgorgement order.{38}
[78] In the case of each of the frauds, the Merits Decision concluded that investors had been put to a substantial risk and that their investment in the Adelaide LP was not what they bargained for. Viewed holistically, the four frauds operated together to achieve the intended result, which was the ultimate diversion of the "lift" to Furtado's personal benefit, and resulted in exposing the investors to risks they had not anticipated.
[79] Furtado submits that none of the investor witnesses were asked whether the non-disclosure of the personal benefit would have affected their decision to invest or stay invested in the Adelaide LP. Without this evidence, he submits, there is no evidence to support the Commission's submission. While reliance may not be necessary to establish fraud, Furtado submits, evidence of reliance is necessary to conclude that the amounts in question were obtained as a result of the non-compliance. As such, Furtado submits, the Commission cannot connect the specific findings of fraud made in the Merits Decision to any monetary result. Disgorgement of the full amount invested is not appropriate for this reason alone, Furtado submits.
[80] In support of this position, Furtado refers us to R v Bikhit.{39} We do not find this decision persuasive on this point. Bikhit is a decision of the Ontario Superior Court of Justice considering fraud allegations under the Criminal Code, which is distinct from the matter before us. The sections of that decision Furtado cites describe the subjective element of the test for fraud under those provisions and conclude, based on the facts in that case, that there was no fraudulent omission. In the matter before us, the Tribunal has already concluded in the Merits Decision that there was fraud, including by fraudulent omission.
[81] Furtado submits that we should be guided by the findings of the British Columbia Court of Appeal in Voegtlin v Paprotka.{40} In that case, the Court commented that where a property was worth its price (as Furtado submits the uncontested evidence confirms in this case), a sophisticated investor would be indifferent to whether a portion of the purchase price was being paid to a developer as a finder's fee, as opposed to going to the vendor.
[82] We agree that Voegtlin is on point, but it is distinguishable. In that case, investors in a limited partnership formed to purchase a property lost their entire investment when the project wasn't completed. The investors lost at trial and then appealed on one issue -- that the developer breached its fiduciary duty based on a failure to properly disclose the quantum of the finder's fee and the granting of a mortgage to secure the finder's fee, which was not in the best interests of the partnership.
[83] The case is distinguishable because investors in Voegtlin received a term sheet prior to investing that disclosed that a sizeable finder's fee would be paid to a related party, and that the finder's fee reflected the equity in the land. Investors in the Adelaide LP received no such disclosure.
[84] Furtado goes on to submit that investor losses were caused by the Commission appointing a Receiver over the Go-To projects, including the Adelaide Project. The Divisional Court in Pushka found that the phrase "as a result of" requires a causal link between "amounts obtained" and the "non-compliance". The Court stated that, "the analysis of causation includes consideration of events that interrupt the chain of causation and principles of remoteness."{41}
[85] Furtado submits that the evidence at the hearing that appointing a receiver would inevitably result in investor losses was uncontested. The Commission's appointment of the Receiver, Furtado submits, "broke the chain of causation" between the non-compliance (the failure to disclose Furtado's personal benefit) and the losses incurred by investors as a result of the Receivership. Having caused that break, Furtado submits, the Commission cannot now seek disgorgement for the consequences the Commission brought on itself.
[86] We do not find Furtado's submissions persuasive. Furtado is asking us to consider the Commission's request for a disgorgement order only in the context of the one finding of fraud, the failure to disclose his intended personal benefit to investors. We decline to take that narrow approach. The respondents, including the corporations that Furtado directed or controlled, were found to have committed five frauds, four of which we are considering as part of our disgorgement analysis. As indicated above, the result of these frauds viewed together as a whole was the creation of the risk to investors that their investment differed significantly from what they had bargained for. To view the matter more narrowly is to miss the nature and impact of the respondents' misconduct.
[87] Disgorgement under the Act is not a compensatory order. As we indicated earlier, a disgorgement order can be appropriate and has been ordered in circumstances where there were no direct losses to investors.{42} The harm to investors in the Adelaide LP was that they were put to the substantial risk that their investment was not what they bargained for. As in Pushka, where there were no direct financial losses, the substantial risk to investors warrants a disgorgement order.
[88] The causal link in this instance is between the fraudulent conduct overall and the pecuniary risk that misconduct caused for investors, that their investment was different than they had been led to believe. The Receivership came well after the respondents committed those fraudulent acts creating the risk. There was no break in causation between the respondents' misconduct and the amounts obtained as a result.
[89] Furtado refers us to the Tribunal's decision in TeknoScan Systems Inc (Re) in which, Furtado submits, the Commission's proposed quantification of losses was rejected by the Tribunal based on its speculative nature and lack of causal connection.{43} The Tribunal in TeknoScan was determining whether and to what extent the respondents in that case had benefited or profited from their misconduct and concluded that the Commission had failed to establish a causal link between the fraud and the salaries and bonuses received by the individual respondents. This factual analysis does not assist us in assessing whether there has been a break in the chain of causation for the purposes of disgorgement in the case before us.
[90] We conclude therefore that there were amounts obtained from the respondents' non-compliance with Ontario securities law in the amount of the $42 million invested in the Adelaide LP.
[91] As we noted, while the fraud in this case is not amongst the most serious that has come before the Tribunal, it is nevertheless very serious as investors were exposed to risks they did not bargain for. In addition, we conclude from the Receiver's submissions that it is unlikely that any amounts recovered in the Receivership will be available to unsecured parties and that therefore the investors in the Adelaide LP are likely to suffer significant losses. The seriousness of the misconduct and its impact on investors therefore are significant factors in our decision to order disgorgement.
[92] We conclude there is a reasonably ascertainable amount obtained as a result of the respondents' non-compliance with the Act totalling $22,200,000, as described below.
[93] The Tribunal has held that disgorgement orders should be based on gross amounts obtained, rather than net amounts,{44} recognizing however that disgorgement of the full amount is not mandatory, and the Tribunal has the discretion to order a lower amount.{45}
[94] The Commission is seeking a joint and several disgorgement order for $28,588,087.33. It arrives at this number by starting with the total amount raised from investors: $42 million. It then deducts the $2 million invested by Jain, who was aware of the "lift" and Furtado's intent to receive a personal benefit ($40 million). The Commission then further deducts the $17.8 million returned to investors as redemptions, including the fraudulent return of $16.8 million to Marek and a redemption of an additional $1 million invested by Marek ($22.2 million). Finally, the Commission adds back in the $6,388,087.33 in dividends paid to Furtado Holdings ($28,588,087.33).
[95] The Commission submits that dividends paid to Furtado need to be added back into the calculation because the following events are inextricably linked and should be represented in the disgorgement calculation:
a. the early redemption of Marek's units;
b. the subsequent solicitation of a further $12 million from Marek;
c. entering into the Demand Loan; and
d. the dividend payments to Furtado Holdings.
[96] Furtado submits that we should exclude from the disgorgement calculation the $12 million second investment from Marek because the Merits Decision concluded that Marek didn't rely on the misrepresentations made in the materials provided to him when his investment was solicited. He also submits that we should then also remove the $6,338,087.33 in dividend payments that flowed from this $12 million investment.
[97] The Commission submits that if we were to do that, then we should add back into the calculation the $16.8 million redemption paid to Marek which had been found to be a fraud impacting all the other investors.
[98] The fact that the parties submit different approaches for calculating the amount to be disgorged does not mean that the amount is not ascertainable. Rather, it means that there are a variety of considerations for us when exercising our discretion about what amount we order be disgorged.
[99] As we've indicated above, the four frauds at issue for our disgorgement analysis viewed together impacted all investors, except for Jain. We, therefore, start our calculation with the $42 million raised for the Adelaide project. We deduct Jain's $2 million because Jain was the one initial investor who was aware of the discussions about the "lift" and Furtado's intended personal benefit ($40 million). We also deduct the $17.8 million in redemptions made by the Adelaide LP as is consistent with Tribunal practice ($22.2 million).{46} The Tribunal's decision in Feng assists us in this approach. In that case, where only some investor funds had been misused, contrary to representations made to investors, the Tribunal, nonetheless, ordered disgorgement of all the funds raised, less amounts proven to have been returned to investors.{47}
[100] We decline to use our discretion to add back into the calculation the $6,388,087.33 in dividends paid to Furtado Holdings. While it is tempting to add back in the amounts that Furtado Holdings received directly because of the respondents' misconduct, a disgorgement order (as we laid out earlier) is not directed at the profit made or amounts retained from the misconduct. We focused our analysis on the amounts obtained as a result of the non-compliance, rather than on the amounts Furtado Holdings directly obtained. We conclude that approach appropriately takes into consideration the broad purposes of a disgorgement order and will effectively send the message that when raising capital from the investing public, non-disclosure and misrepresentation that amounts to fraud will result in very serious sanctions.
[101] The onus is not on the Commission to show that victims are unlikely to obtain redress. If a respondent can show that those that suffered losses are likely to obtain redress, that might be a reason to reduce the disgorgement amount.{48}
[102] The Commission submits that Furtado cannot show that the investors who suffered losses are likely to obtain redress. Therefore, there is no reason to reduce the disgorgement amounts sought by any amount that might be recoverable through the Receivership.
[103] Furtado submits that due to the Receivership, which the Commission caused to be put in place, and the number of claims and lawsuits connected with and resulting from the Receivership, we cannot know what the result will be on the investors' ability to recoup their losses.
[104] The Commission submits that in these circumstances we should order disgorgement according to the usual principles, without accounting for the outcome of the receivership process, as laid out in the Tribunal decisions in Money Gate and Paramount. In both those cases, the Tribunal considered whether the respondents' disgorgement order should be reduced based on amounts the receiver may recover from the corporate entities. It was unclear whether there would be further recoveries by the receivers and to what uses the funds recovered would be put. The Tribunal in both instances declined to deduct any amounts from the disgorgement calculation that might reflect unknown, if any, future recoveries through the receivership process. The Tribunal in both cases proceeded to order disgorgement based on the facts before it at the time, without speculating about potential future recoveries.{49}
[105] We adopt the Tribunal's approach reflected in those cases. We decline to deduct from the disgorgement calculation amounts that may be returned through the Receivership to investors who suffered losses. To do so would require us to speculate about what, if any, amounts may be returned to investors, which would not be appropriate. Any party may apply to the Commission to vary our order, based on more current information regarding the Receiver's ability to repay funds to investors.
[106] Furtado submits that the ability to seek a variance of any order is not realistic, as the Commission has recently moved to put respondents into bankruptcy when they have failed to pay disgorgement orders made by this Tribunal. It is true that the Commission has a wide variety of tools available for it to pursue its legislative purposes. However, this Tribunal should not be constrained in crafting appropriate sanctions by speculating about what actions the Commission may or may not take because of Tribunal orders.
[107] A disgorgement order is appropriate where it will ensure that the respondents do not benefit in any way from their breaches of the Act, and it deters others from similar misconduct, thereby protecting investors and restoring confidence in the capital markets.{50}
[108] Committing fraud when raising capital from the investing public will not be tolerated. In this instance, disgorgement ensures this message is clear for the respondents and for any like-minded individuals who seek to take advantage of investors who rely on them for a true representation of the risks of the investment they are making.
[109] The Commission has asked that the disgorgement order be joint and several among all respondents. As we indicated above, the Receiver has not asked us to exclude the Corporate Respondents from any sanctions and costs order, including disgorgement. For the reasons above we conclude that a disgorgement order, joint and several against all respondents, in the amount of $22,200,000 is in the public interest.
[110] Paragraph 9 of s. 127(1) of the Act has been recently amended to provide that if a person or company has not complied with Ontario securities law, the Tribunal may require the person or company to pay an administrative penalty of not more than $5 million for each failure to comply. However, in this matter, the Commission seeks administrative penalties of up to $1 million for each violation of the Act, consistent with the limits that applied prior to the amendment.
[111] The Commission is seeking an order that the respondents pay the following amounts in administrative penalties:
a. Furtado: $1.3 million, which includes $1 million for fraud and $300,000 for misleading the Commission;
b. Go-To Developments Holdings: $750,000;
c. Furtado Holdings: $750,000; and
d. Adelaide GP: $750,000.
[112] For the reasons below we conclude it is in the public interest to order the following administrative penalties:
a. Furtado to pay $1,000,000 which includes $750,000 for fraud and $250,000 for misleading the Commission; and
b. Go-To Developments Holdings, Furtado Holdings and Adelaide GP to each pay an administrative penalty of $200,000.
[113] We first consider the administrative penalties the Commission requests for the respondents' fraudulent conduct. We next consider the administrative penalty the Commission requests against Furtado for misleading statements made by him in his compelled interviews.
[114] Determining the amount of an administrative penalty is not a science.{51} Each case must turn on its unique facts. There are, however, factors to be considered in determining an appropriate administrative penalty. We have addressed a number of these factors already in these reasons. In our analysis below, we will consider the level of administrative penalties imposed in other cases cited to us. These precedents reflect a wide range of sanctions that vary according to the circumstances, but they assist us by providing a possible range of penalties and a principled approach to determining appropriate penalties in this case. We also consider all the sanctions we impose on each respondent individually, as well as both specific and general deterrence, and the extent to which those objectives are achieved by all the sanctions we impose.
[115] We adopt the same approach used above in our analysis for disgorgement and consider the five frauds perpetrated by the respondents as a whole for the purposes of determining what administrative penalty is appropriate.
[116] The Commission submits that fraud is a flagrant breach of the Act, generally requiring higher administrative penalties. The Commission further submits that the administrative penalties requested in this case are proportionate to the gravity of the misconduct. The respondents were dishonest in raising investor funds and they misused some of those funds. This placed all investors' interests, except for Jain's, at a risk they had not bargained for. Further, Furtado indirectly obtained quantifiable benefits of nearly $6.4 million.
[117] The respondents assert that the fraudulent activities in this case are not of the most serious nature on the spectrum of frauds, and that there are several factors that should be considered. We discussed those factors above in our analysis of the seriousness of the respondents' misconduct.
[118] The Commission submits that the factors asserted by Furtado as providing context for the fraudulent conduct are in some instances not established as facts and/or are not mitigating as a matter of law. The Commission further submits that there is no indication that Furtado appreciates the wrongfulness of his conduct, citing various attempts by Furtado to blame or impugn various people (including the Commission, the Receiver, his prior counsel and various investors) for various issues. The Commission submits that such an approach only underscores the need for significant sanctions to ensure that the goal of specific deterrence is met.
[119] The Commission further submits that the administrative penalties requested are proportionate to the range of penalties imposed in comparable cases. The Commission referred us to the following decisions in support of its request:
a. Bridging: a 2025 decision in which separate administrative penalties were ordered against two individual respondents who perpetrated three frauds on more than 26,000 investors. For the first fraud, administrative penalties of $1 million and $600,000 were ordered, relating to diversion of funds to their personal benefit. Further administrative penalties were ordered in respect of the second and third frauds of $700,000 and $400,000 against one respondent and $600,000 and $500,000 against the second respondent. These second and third frauds involved the diversion of, respectively, approximately $40 million and $30 million of investor funds.{52}
b. Paramount: a 2023 decision in which administrative penalties of $1.5 million and $1 million were ordered against two individual respondents who had perpetrated three frauds on more than 500 investors, by (i) diverting $50 million of $70 million raised from investors to high-risk mortgages investments, contrary to representations made to investors; (ii) improperly acquiring ownership interests in projects which received investor finds; and (iii) misusing almost $5 million in a pre-paid account meant to benefit investors, for their own purposes. A third respondent received an administrative penalty of $500,000 due to the existence of mitigating factors.{53}
c. Money Gate: a 2021 decision in which administrative penalties of $750,000 and $600,000 were ordered against the two individual respondents who had perpetrated a fraud on more than 150 investors and diverted over $8.7 million of $11 million of investor funds for the benefit of the respondents and their related entities.{54}
[120] The Commission submits that Paramount is a particularly useful comparator. Paramount involved a misuse of $50 million contrary to representations made to investors, whereas the respondents raised $42 million based on the fraud perpetrated in this case, which included misrepresentations to investors. Paramount also involved a misappropriation of $5 million for the respondents' own purposes, whereas Furtado indirectly received almost $6.4 million.{55}
[121] Furtado submits that the quantum of the administrative penalty sought by the Commission is so excessive as to be punitive, and the circumstances of this case are not remotely analogous with those in the cases cited by the Commission. Furtado distinguishes Paramount and other cases involving the diversion of investors' funds from this case, arguing that in this case, he did not engage in a diversion of funds. Rather, Furtado asserts that because the "lift" was not disclosed, this left investors without assurance that the purchase price for the properties would be negotiated solely in the best interests of the Adelaide LP and thereby resulted in a risk to investors for which they had not bargained. The Commission asserts that Furtado's submissions erroneously imply that failure to disclose the "lift" was the only fraudulent conduct found by the Merits Panel, which was not the case.
[122] Furtado submits that the Solar Income Fund (Re) case is a useful comparator as it involved findings of fraud in the context of the operation of a legitimate business, and the respondents in this case were also involved in a legitimate business. In Solar Income Fund, administrative penalties ranged from $175,000 for the corporate respondent to $125,000 to $175,000 for individual respondents.{56} The Commission submits that Solar Income Fund is not a helpful case as it involved the diversion of approximately $235,000, which pales in comparison to the amounts involved in the respondents' fraudulent conduct.
[123] Furtado also relies on TeknoScan in support of the lower administrative penalty range he proposes. In that case, the respondents received administrative penalties of $150,000 to $450,000.{57} Furtado argues that TeknoScan is an example where the fraud was not the most egregious, as the fraudulent disclosure was in connection with a legitimate business, and the respondents received no personal benefits from the fraud. The Commission submits that TeknoScan should be contrasted with the case before us as the Merits Panel found that, in addition to providing misleading disclosure, Furtado intended to and planned to benefit from the fraud.
[124] The Commission seeks a higher administrative penalty for Furtado to reflect his role as the directing mind of all the Corporate Respondents. The Commission seeks a separate administrative penalty against each of the Corporate Respondents in a lesser amount to reflect their roles in the frauds as vehicles through which funds flowed at Furtado's directions.
[125] The Commission submits that the purpose of administrative penalties is deterrence and, as a matter of principle, each party involved in a fraud should be responsible for its role in the fraudulent conduct. The Commission asserts that for this reason the Commission is not requesting that any administrative penalties be ordered jointly and severally. We do not adopt the Commission's view as a matter of principle. Rather, we defer to the facts and circumstances of each case as the determinant of whether a joint and several order is warranted.
[126] We agree that the fraudulent conduct on the part of the respondents was not the most egregious kind, that there was a legitimate business involved and that no registerable activity was carried on. We find however that the conduct in this case was on the more serious end of the fraud spectrum. Furtado intended, planned and expected to benefit from the purchase of the Adelaide Properties, and failed to disclose that to investors and he committed the other frauds the end result of which was the achievement of his purpose. We also agree that Furtado continued to point blame at other persons on several occasions.
[127] Administrative penalties are an important tool to ensure deterrence. In this case, we believe that both specific and general deterrence require substantial administrative penalties against all the respondents, with Furtado bearing the higher penalty for being the directing mind of the Corporate Respondents.
[128] We find that an administrative penalty of $750,000 against Furtado is warranted for the frauds in this case. We further find that an administrative penalty of $200,000 is warranted against each of the Corporate Respondents for the roles each played in the frauds.
[129] The Commission did not ask for any of the administrative penalties to be made joint and several. Although we considered a joint and several order may be appropriate in this case because the Corporate Respondents acted at Furtado's direction, our order against Furtado is not made jointly and severally with the Corporate Respondents. Furtado is not part of the Receivership, and we do not believe the Receiver and any beneficiaries of the Receivership should be impacted by the administrative penalty against him.
[130] We now turn to the administrative penalty the Commission requests against Furtado in the amount of $300,000, for misleading the Commission during its investigation of his receipt of dividend payments.
[131] The Commission submits that the requested amount is proportionate to penalties imposed for similar conduct in other cases. The administrative penalties in those cases range from $200,000 to $1 million.
[132] In Kitmitto, one respondent was found to have misled the Commission as to the reason he traded shares on a particular day. The Tribunal found that he intentionally concealed the trade from internal compliance and evaded questions in the Commission investigation in claiming not to remember the trade.{58} A $250,000 administrative penalty was ordered.{59}
[133] In Mughal Asset Management Corporation (Re),{60} the respondent was found to have made multiple false and misleading statements during two interviews with the Commission and disclosed the investigation and summons to an investor. The Tribunal imposed a $350,000 administrative penalty for the two breaches.
[134] Furtado submits that he never denied the receipt of the payments and that the Commission was aware of the payments during the investigation. Furtado submits that the Merits Panel found his testimony misleading only in relation to the reasons for which he received payments, not the fact of their receipt. Furtado argues that his conduct cannot be equated with the breaches at issue in the cases relied upon by the Commission in which the underlying conduct itself was hidden. Furtado submits that any administrative penalty should not exceed $200,000.
[135] The Merits Panel found that Furtado made statements to the Commission during his interviews that were misleading or untrue in a material respect. Making misleading or untrue statements to the Commission is very serious misconduct. It matters not in our case whether the statements related to receiving payments or the reason for those payments. As a result, we find that $250,000 is the appropriate administrative penalty for this breach.
[136] Section 127.1 of the Act authorizes us to order that a respondent who has contravened Ontario securities law pay the Commission's costs of the investigation and the proceeding.
[137] The Commission seeks total costs of $1,137,416.85. This amount consists of $1,122,306.75 in costs incurred, after a deduction of 10 percent, and $15,110.10 in disbursements. For the reasons below we order the respondents to pay, jointly and severally, costs in the amount of $638,613.85.
[138] We have the discretion, under s.127.1 of the Act, to order a person or company to pay the costs of any investigation and/or a hearing if we are satisfied that the respondents have not complied with Ontario securities law.
[139] A costs order is not a sanction. It is a means of recovering the costs of an investigation and hearing from those who have breached Ontario securities law. A costs order will not necessarily recover all costs incurred, but it is appropriate that some of those costs are borne by those who have been found to have contravened securities law.{61}
[140] The Commission submits that the amount of costs it is seeking is supported by the fact that:
a. the breaches were serious and complex, involving multiple aspects to the fraud, Furtado's denial of certain facts, and Furtado's misleading the Commission during the investigation; and
b. the investigation and litigation extended over a considerable period. The investigation started in October 2019. The proceeding began in March 2022 and took place over 14 days. It involved testimony from six witnesses for the Commission, a lengthy affidavit from the Commission's investigator, and Furtado testifying in person and via affidavit.
[141] The Commission provided a bill of costs setting out the time spent by various members of Commission staff. It sets out the time spent for two senior forensic accountants, three senior legal counsel, one investigation counsel, two litigation counsel and one law clerk. Claiming the costs of all staff is a recent departure from the Commission's past practice of limiting its claim to time spent by only one litigation counsel and only one investigator.
[142] The Commission took a similar approach in Bridging. The Tribunal in Bridging allowed the approach, because the respondents in that case offered no legal principle that would have permitted the Tribunal to compel the Commission to follow its previously self-imposed practice.{62} Having allowed the approach, the Tribunal in Bridging then exercised its discretion to reduce the amount of costs sought by 30% across-the-board, to "recognize the inefficiencies inherent in long, complex investigations and proceedings that inevitably involve some turnover in assigned personnel."{63}
[143] The Commission reduced the amount of the costs they are seeking in this matter. They did not include certain costs in the calculation, and they applied a 10 percent discount to the costs incurred to account for the Tribunal's dismissal of the s. 25(1) and related s.44(2) allegations.
[144] No further reductions are warranted, the Commission submits, because the amount it is seeking is significantly less than the actual costs incurred, a discount has already been applied and the hourly rates of Commission personnel are very low, have not changed in many years, and have fallen far behind given inflation. We make no comment on the latter point, which is beyond the purview of the Tribunal and is not a matter to be addressed through cost awards against specific respondents.
[145] In addition, the Commission submits that no further reduction is warranted because the respondents contributed to the delay in this matter, including Furtado's multiple requests for adjournment of the merits hearing.
[146] The Commission submits that the Tribunal has awarded significant costs in cases involving fraud. The Commission cited the Tribunal's order of $600,000 of costs in Paramount, a five-day hearing that concerned fraud, among other allegations.{64}
[147] Furtado characterizes the Commission's cost request as unrealistic and excessive. The Commission spent 2.4 years of full-time hours on this matter, by Furtado's calculation. The Commission's proposed 10 percent discount is, Furtado submits, insufficient and inconsistent with past and recent practice. The proposal, Furtado submits, fails to account for the fact that the Tribunal has repeatedly acknowledged that constant changes in staffing of the nature that occurred during the investigation and prosecution of this case, will inevitably result in duplication of work and inefficiencies. The costs associated with such matters, being outside of Furtado's control, should not be borne by him.
[148] Furtado also submits that the costs of the Commission refusing to consent to his request to adjourn the merits hearing for health reasons should be deducted from the Commission's cost request. Furtado received the adjournment despite having to bring a contested motion on three occasions.
[149] An award of costs more than $1 million is out of line with other proceedings of a similar length where findings of fraud were made, Furtado submits. Costs awards in cases of similar length and complexity ranged from approximately $200,000 to $670,000. Furtado submits that costs greater than $1 million have only been awarded by the Tribunal on two occasions -- one involving a 35-day hearing and the other a 28-day hearing.{65} An award of this size, Furtado submits, will send the message that private litigants cannot afford to defend themselves against allegations made by the Commission. While a respondent found to have contravened Ontario securities law should expect to pay costs, a cost award of this size can reasonably be viewed as punitive.
[150] In exercising our discretion to award costs, we must balance the principle that some of the costs should be borne by those who have contravened Ontario securities laws, against the risk that a high cost award may act as a deterrent to respondents willing to defend themselves against Commission allegations.
[151] We recognize that this matter was complex. It involved numerous corporate entities and limited partnerships and the flow of funds among those entities. In the merits hearing in this matter, the Tribunal concluded that Furtado had committed fraud, in five instances, and had mislead the Commission during the investigation. That is serious misconduct. The Commission was not successful on two of the alleged breaches, s. 25(1) and s. 44(2). The merits hearing, while it occurred over 14 days, took around nine days. Shorter hearing days were ordered by the Tribunal to accommodate Furtado's health.
[152] The amount of a cost award is an exercise of our discretion. Precedents are helpful but not determinative. We note that the two recent cases where costs more than $1 million were awarded were lengthier and more complex than this proceeding.{66} Other proceedings involving fraud of a similar length resulted in significantly smaller cost awards.{67}
[153] In this instance, balancing all the above factors, we apply an across-the-board discount of 50% to the costs incurred by the Commission ($1,247,007.50). Total costs are awarded against the respondents, jointly and severally, in the amount of $623,503.75, plus disbursements of $15,110.10, for a total of $638,613.85.
[154] For the above reasons, we order that:
a. pursuant to paragraphs 2 and 2.1 of subsection 127(1) of the Act:
i. trading in securities of Go-To Developments Holdings, Adelaide GP, and Furtado Holdings shall cease for a period of 10 years, except for trades effected by the Receiver;
ii. Go-To Developments Holdings, Adelaide GP, and Furtado Holdings are prohibited for a period of 10 years from trading in any securities or derivatives, or acquiring any securities, except for any trades or acquisitions effected by the Receiver; and
iii. Furtado is prohibited for a period of 10 years from trading in any securities or derivatives, or acquiring any securities, except that he may trade securities or derivatives, and acquire securities, in a Registered Retirement Savings Plan, Registered Retirement Income Fund, Registered Education Savings Plan, Registered Disability Savings Plan or Tax-Free Savings Account (as those terms are defined in the Income Tax Act, RSC, 1985, c 1 (5th Supp)), of which he, his spouse or his children are the sole legal and beneficial owners, through a registered dealer in Canada to whom he has given a copy of this order;
b. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to the respondents for a period of 10 years;
c. pursuant to paragraphs 7 and 8.1 of subsection 127(1) of the Act, Furtado shall resign any positions that he holds as a director or officer of any issuer or registrant;
d. pursuant to paragraphs 8 and 8.2 of subsection 127(1) of the Act, Furtado is prohibited from becoming or acting as a director or officer of any issuer or registrant for a period of 10 years;
e. pursuant to paragraph 8.5 of subsection 127(1) of the Act, the respondents are prohibited from becoming or acting as a registrant or as a promoter for a period of 10 years;
f. pursuant to paragraph 9 of subsection 127(1) of the Act:
i. Furtado shall pay an administrative penalty in the amount of $1,000,000 to the Commission;
ii. Go-To Developments Holdings shall pay an administrative penalty in the amount of $200,000 to the Commission;
iii. Adelaide GP shall pay an administrative penalty in the amount of $200,000 to the Commission; and
iv. Furtado Holdings shall pay an administrative penalty in the amount of $200,000 to the Commission;
g. pursuant to paragraph 10 of subsection 127(1) of the Act, the respondents shall, jointly and severally, disgorge to the Commission $22,200,000; and
h. pursuant to section 127.1 of the Act, the respondents shall, jointly and severally, pay to the Commission $638,613.85 for costs of the investigation and proceeding.
Dated at Toronto this 6th day of March, 2026
{1} Go-To Developments Holdings Inc (Re), 2025 ONCMT 8
{2} RSO 1990, c S.5 (the Act)
{3} Committee for the Equal Treatment of Asbestos Minority Shareholders v Ontario (Securities Commission), 2001 SCC 37 at para 42
{4} York Rio Resources Inc (Re), 2014 ONSEC 9 at para 34
{5} Feng (Re), 2023 ONCMT 43 (Feng) at para 10
{6} Solar Income Fund (Re), 2023 ONCMT 3 (Solar Income Fund) at para 20, citing Money Gate Mortgage Investment Corporation (Re), 2021 ONSEC 10 (Money Gate) at para 14
{7} Money Gate at para 14
{8} Solar Income Fund at para 25
{9} Paramount Equity Financial Corporation (Re), 2023 ONCMT 20 (Paramount) at para 16
{10} Exhibit 132 (merits hearing), Affidavit of Andrew Gordon affirmed June 28, 2024 (Gordon Affidavit) at ex 22, vol 2, p 3
{11} Gordon Affidavit at ex 22, vol 3, p 3
{12} First Global Data (Re), 2023 ONCMT 25 (First Global Data) at paras 213-14; Global Energy Group Ltd, 2013 ONSEC 44 (Global Energy Group) at para 61
{13} Solar Income Fund at para 7; Paramount at para 12
{14} First Global Data at paras 213-14; Global Energy Group at para 61
{15} Money Gate at para 84(a)(iii); Bridging Finance Inc (Re), 2025 ONCMT 10 (Bridging) at para 139(b)(i); Feng at para 100(a)(i)
{16} Limelight Entertainment Inc, 2008 ONSEC 28 (Limelight) at para 87
{17} Borealis International Inc (Re), 2011 ONSEC 11 at paras 51-55, 59
{18} Bridging at para 139(b)(i); Feng at para 100(a)(i); Money Gate at para 84(a)(iii)
{19} VRK Forex & Investments Inc (Re), 2022 ONCMT 28 (VRK) at para 39; Kitmitto (Re), 2023 ONCMT 4 (Kitmitto) at para 23
{20} VRK at para 39
{21} Kitmitto at para 22
{22} Natural Bee Works Apiaries Inc (Re), 2019 ONSEC 31 at para 72
{23} Solar Income Fund at para 127
{24} Al-Tar Energy Corp, 2011 ONSEC 1 (Al-Tar) at para 71
{25} North American Financial Group Inc v Ontario Securities Commission, 2018 ONSC 136 (Div Ct) (North American Financial) at para 218
{26} Paramount at para 71
{27} Feng at para 54; First Global Data at para 86; Paramount at para 72
{28} Limelight at paras 49-51; North American Financial at para 217
{29} Pushka v Ontario Securities Commission, 2016 ONSC 3041 (Div Ct) (Pushka) at para 253; Limelight at paras 49-51
{30} First Global Data at para 97, citing Limelight at para 59
{31} Paramount at para 79, First Global Data at paras 114-115.
{32} Pushka at para 257
{33} Merits Decision at para 83
{34} Merits Decision at para 94
{35} Merits Decision at para 95
{36} Merits Decision at para 115
{37} Solar Income Fund at para 102
{38} Pushka at para 255, citing Crown Hill Capital Corporation (Re), 2014 ONSEC 22 at paras 121-127
{39} R v Bikhit, 2024 ONSC 3318 at paras 223 and 250-251
{40} Voegtlin v Paprotka, 2014 BCCA 323 (Voegtlin) at para 25
{41} Pushka at 254
{42} Solar Income Fund at para 102
{43} TeknoScan at para 39
{44} Feng at para 67 citing Bradon Technologies Ltd, 2016 ONSEC 19 at para 85
{45} Feng at para 67 citing Quadrexx Hedge Capital Management Ltd (Re), 2018 ONSEC 3 at para 47
{46} Money Gate at paras 57-58
{47} Feng at para 69
{48} Pro-Financial Asset Management (Re), 2018 ONSEC 18 at para 70
{49} Money Gate at paras 60-61; Paramount at para 86
{50} Al-Tar at para 71
{51} Feng at para 73
{52} Bridging at paras 1, 8, 33, 60, 71, 76, 90, 97 and 100
{53} Paramount at paras 2, 18, 25-28 and 115
{54} Money Gate at paras 1, 57-58, 71-72
{55} Paramount at para 17
{56} Solar Income Fund at para 111
{57} TeknoScan at para 57
{58} Kitmitto (Re), 2022 ONCMT 12 at paras 212-218
{59} Kitmitto at para 46
{60} Mughal Asset Management Corporation (Re), 2024 ONCMT 14 (Mughal) at paras 118, 122
{61} 2241153 Ontario Inc, 2016 ONSEC 10 at para 16, aff'd Evgueni Todorov and Sophia Nikolov v Ontario Securities Commission, 2018 ONSC 4503 (Div Ct)
{62} Bridging at para 128
{63} Bridging at para 131
{64} Paramount at para 140
{65} First Global Data Ltd (Re), 2022 ONCMT 25; First Global Data at para 259(g); Bridging Finance Inc (Re), 2024 ONCMT 23; Bridging Finance at para 138
{66} First Global Data at para 259(g); Bridging Finance at para 138
{67} Mughal -- 3-day hearing and a costs order of $295,413.65; Hogg (Re), 2024 ONCMT 32 -- 4-day hearing and a costs order of $667,605.27; Paramount -- 5-day hearing and costs order of $600,000; Feng -- 6-day hearing and costs order of $206,769.34; TeknoScan -- 20-day hearing and costs order of $400,000
Ontario Securities Commission and Radhakrishna Namburi -- ss. 127(1), 127.1
Citation: Ontario Securities Commission v Namburi, 2026 ONCMT 13
Date: 2026-03-09
File No. 2025-24
BETWEEN:
(Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5)
Adjudicator: |
Dale R. Ponder |
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Hearing: |
In writing; final written submissions received December 4, 2025 |
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Appearances: |
Susan Kimani |
For the Ontario Securities Commission |
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Matthew McMurray |
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No one appearing for Radhakrishna Namburi |
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[1] In October 2022, following a contested hearing, Radhakrishna Namburi was ordered by the Tribunal to resign from any positions he held as a director or officer of an issuer and was banned from becoming or acting as a director or officer of an issuer for ten years.{1} The Ontario Securities Commission now alleges that Namburi breached that order by remaining a director of two issuers for about three years after the ban, thereby contravening Ontario securities law.
[2] This enforcement proceeding combines the merits and sanctions and costs hearings against Namburi and is being conducted in writing, pursuant to an order dated October 29, 2025.{2}
[3] Namburi did not participate in this proceeding and did not file any materials, despite being properly served and being given multiple opportunities to do so.
[4] As I explain below, Namburi did breach the 2022 order by failing to resign as required and by continuing as a director of two companies. He thereby contravened Ontario securities law. As a result, I conclude that:
a. Namburi must pay an administrative penalty of $7,500;
b. on or before April 9, 2026, Namburi must resign any positions he holds as a director or officer of any issuer;
c. until April 7, 2037, Namburi is prohibited from being a director or officer of any issuer; and
d. Namburi must pay to the Commission costs of $4,328.75.
[5] The factual findings in these reasons are based on uncontradicted evidence contained in affidavits filed by the Commission from Paul Baik, Investigator,{3} and Julia Ho, Law Clerk.{4}
[6] Namburi, an Ontario resident, was a respondent in VRK Forex & Investments Inc (Re).{5} On October 7, 2022, the Tribunal issued a sanctions and costs order against Namburi. The order required Namburi to resign any positions he held as a director or officer of an issuer and prohibited him from becoming or acting as a director or officer of an issuer for a period of ten years.
[7] The Commission's allegations in this proceeding relate to Namburi's involvement with two companies -- VRK Forex & Investments Inc. and SSR Imports and Exports Inc.
[8] On December 20, 2024, and again on January 9, 2025, the Commission asked Namburi to provide evidence of his compliance with the October 2022 order. On January 11, 2025, Namburi replied, regarding VRK, that he would "now" proceed "to remove [his] name and closings of the company" and, regarding SSR, that he had resigned his directorship.
[9] On January 16, 2025, Namburi sent the Commission a government report for SSR, which indicated that as of that date, he was no longer listed as a director of SSR. On the same date, he reiterated that he had "closed" VRK, but did not provide any evidence to support this claim.
[10] The Commission's affidavit evidence, including reports issued by the Ontario government, and correspondence with Namburi, confirm the following:
a. with respect to VRK Forex & Investments Inc.: Namburi became a director of VRK in 2011, and the company was inactive due to voluntary dissolution effective November 6, 2025, three years after the 2022 order; and
b. with respect to SSR Imports and Exports Inc.: Namburi became a director of SSR in 2017, and ceased to be a director on its dissolution on December 2, 2024, more than two years after the 2022 order.
[11] Namburi has not participated in any part of this proceeding.
[12] The Tribunal held a case management hearing in this matter on October 29, 2025. Namburi did not attend. I found that he had been properly served at the email address he had previously used to communicate with the Commission and proceeded in his absence. The order arising from that hearing, which provided a deadline for Namburi to serve and file written evidence and submissions for this hearing, was sent to him by the registrar and posted on the Tribunal's website. Namburi did not file any materials by that deadline.
[13] On January 21, 2026, it was brought to my attention by counsel for the Commission that Namburi has been in communication with them. Among other things, Namburi stated that he had been having email connectivity issues and that his failure to resign from the companies identified by the Commission was "not [his] mistake". On January 22, I advised Namburi through the registrar that he would have an additional two weeks to serve and file materials or otherwise make a request for relief from the Tribunal. I advised Namburi that if wished to make an argument for the Tribunal's consideration it needed to be sent to me, through the registrar, copying the Commission within the extended deadline. Namburi did not file any materials or send any correspondence through the registrar.
[14] I conclude it is appropriate to proceed with this written hearing without Namburi's participation.{6}
[15] The Securities Act{7} (the Act) defines "Ontario securities law" to include a decision of the Commission or Tribunal to which a person is subject. The October 2022 order is part of Ontario securities law as applied to Namburi.
[16] The Commission submits that the evidence demonstrates a clear breach of the October 2022 order. I agree. The Commission provided evidence of Namburi's resignation from SSR effective December 2, 2024, and the dissolution of VRK effective November 6, 2025, showing that it was not until November 6, 2025, that Namburi became fully compliant with the October 2022 order.
[17] By continuing to be a director of these two companies while the director and officer bans were in effect, Namburi breached the October 2022 order and thereby contravened Ontario securities law.
[18] The Commission asked that I make a finding that by contravening Ontario securities law, Namburi breached s. 122(1)(c) of the Act, which states that a "person or company that [...] contravenes Ontario securities law, is guilty of an offence [...]". I adopt the reasoning set out in the recent Ontario Securities Commission v Carnie decision in which the Tribunal found it to be unnecessary in a case such as this to also make a finding under s. 122(1)(c).{8} Having found that Namburi contravened Ontario securities law by breaching the October 2022 order, nothing is gained from also making a finding that he breached s. 122(1)(c) of the Act, so I decline to make this finding.
[19] Having decided that Namburi contravened Ontario securities law, I now turn to a determination of the appropriate sanctions and costs to order against him. I may impose sanctions under s. 127(1) of the Act if I find it is in the public interest to do so. The exercise of that jurisdiction must be consistent with the purposes of the Act, including the protection of investors from unfair, improper or fraudulent practices, and the fostering of fair and efficient capital markets.{9} The jurisdiction is protective and preventative in focus, not punitive.{10}
[20] The Commission submits the following sanctions and costs are in the public interest:
a. an order that Namburi resign as a director or officer of any issuer, within 30 days of the Tribunal's order;
b. an order that Namburi be prohibited from becoming or acting as a director or officer of any issuer for a further period of four years and six months from October 7, 2032, the date of expiry of the ban contained in the October 7, 2022, order;
c. an order that Namburi pay an administrative penalty of $7,500; and
d. an order that Namburi pay $5,957.36 for costs of the investigation and proceeding.
[21] I agree with the Commission's submissions that an extension of the original director and officer ban by an additional four years and six months together with an administrative penalty of $7,500 is in the public interest. I find that a lower costs order than that sought by the Commission is appropriate in this case.
[22] I will address each of the requested sanctions and the requested order for costs in turn. I begin with a discussion of the well-established sanctioning factors{11} that apply in this case.
[23] I may consider a variety of factors when imposing sanctions. In this case, I consider the most relevant factors to be the seriousness of the misconduct, the recurrent nature of the misconduct involving two corporations and about three years in duration, the need to achieve both specific and general deterrence, and the absence of any mitigating factors.
[24] While not amongst the most serious misconduct that has come before this Tribunal, Namburi's misconduct is serious. Breaching a Tribunal order is serious and egregious.{12} Respect for and compliance with Tribunal orders is a critical element in the regulation of Ontario's capital markets. A breach of a Tribunal order shows a disregard for the rule of law as well as for the Tribunal and its processes.{13} Further, non-compliance with Tribunal orders diminishes their deterrent effect and erodes confidence in the regulatory process and the capital markets.{14}
[25] Since Namburi did not participate in this proceeding, I do not have evidence of any mitigating factors. The Commission submits there are none.
[26] Namburi's misconduct was not an isolated occurrence. He remained a director of SSR for two years, and VRK for three years, despite the director and officer ban imposed in October 2022 and despite the Commission asking him for confirmation of his compliance.
[27] The Commission's evidence shows that Namburi became fully compliant with the director and officer ban close to a year after the Commission initially contacted him, and when he was initially asked to provide evidence of his compliance he did not do so. The Commission submits that Namburi ignoring specific warnings or advice about the requirement to comply with a director and officer ban is an aggravating factor. I agree. Namburi's behaviour shows a repeated disregard for compliance.
[28] In determining sanctions, it is appropriate for the Tribunal to consider the likely effect the sanction would have on the respondent (specific deterrence) as well as on others (general deterrence).
[29] The Commission submits that the requested administrative penalty and new director and officer ban will effectively meet the goals of specific and general deterrence.
[30] In keeping with the goal that sanctions be preventative, I must impose sanctions that convey a clear message to Namburi that compliance with Tribunal orders is not optional. The sanctions should convey to him that there are serious consequences that come with a failure to abide by the terms of an order and that repeated contravention may require an even more significant response.
[31] The sanctions I impose also should send a message to others tempted to ignore Tribunal orders that serious consequences will follow continued non-compliance.
[32] Participation in the capital markets is a privilege, not a right.{15} Disregarding a Tribunal order is serious and warrants a further ban from participation in the capital markets.{16}
[33] The Commission submits that a new director and officer ban of four years and six months is appropriate in this case. This ban would approximate the amount of time Namburi was in breach of the existing director and officer ban (three years) plus an additional 18 months.
[34] The Commission also submits that an order requiring Namburi to resign as a director or officer of any issuer is appropriate, in the event that he remains a director or officer of an issuer of which the Commission is unaware, including any issuer he may have become an officer or director of during this proceeding.
[35] I accept this as a reasonable approach to reflect the time during which Namburi ignored the bans imposed upon him in the 2022 order, and to achieve the objective of specific deterrence in light of his earlier noncompliance with the bans. I will issue the order requested by the Commission.
[36] If a person or company has not complied with Ontario securities law, the Tribunal may order payment of an administrative penalty of not more than $5,000,000 for each failure to comply. Determining the appropriate amount of an administrative penalty is not a science.{17} In the past, the Tribunal has emphasized the seriousness of the misconduct and the importance of deterrence as particularly relevant to this question.{18}
[37] In this case, the Commission is seeking an administrative penalty of $7,500 against Namburi. This amount is based on a penalty of $1,500 per year of breach of the director and officer ban per issuer (i.e., $1,500 x 2 for SSR plus $1,500 x 3 for VRK = $7,500)
[38] The Commission cited several authorities in support of its request.{19} However, the guidance these precedents can provide is limited given the wide range of penalties ordered in each, ranging from $40,000 to $500,000, and, as noted below, the important contextual differences that exist.
[39] In Valentine, for example, this Tribunal imposed an administrative penalty of $500,000 for the respondent's breach of a director and officer ban in respect of 38 private companies over an extended period of about 19 years. On a per breach basis that penalty approximates to only $693 per issuer per year. However, the Tribunal imposed other significant sanctions in that case given the seriousness and extent of the violations involved, including a disgorgement order totalling over $15 million, and in its reasons noted that it was taking a global view of all the sanctions it imposed.{20}
[40] In the other authorities cited by the Commission, the administrative penalties ranged from $2,750 to $15,000 per issuer per year of breach. The Commission distinguished the cases with higher sanctions because they featured various aggravating factors that are not present here (i.e., attempts to conceal non-compliance, and respondents' active involvement in capital markets).
[41] I note that the authorities provided by the Commission on their face also did not seem to adopt a mathematical calculation in arriving at the penalties imposed. However, I accept the Commission's proposal for a total administrative penalty of $7,500 as a reasonable outcome in these circumstances. The Commission's proposed penalty, together with the new director and officer ban, adequately addresses the sanctioning factors I've outlined in these reasons, including the seriousness of the misconduct and specific and general deterrence objectives. I see no reason to depart from the Commission's proposal, and I will issue the requested order.
[42] Section 127.1 of the Act gives the Tribunal discretion to order a person or company to pay the costs of an investigation or a hearing if satisfied that the person or company has not complied with Ontario securities law or has not acted in the public interest. A costs order is not a sanction, but rather a means to recover the costs of an investigation or hearing.
[43] The Commission seeks a costs order of $5,957.36 in this case and filed the Ho Affidavit containing the Commission's Bill of Costs to support its request. This amount includes two elements:
a. $4,328.75 in fees, reflecting time spent on this matter by one litigation counsel, one investigator and one law clerk; and
b. $1,628.61, being one ninth of the total amount in fees attributable to a group of nine cases, including this one, that make similar allegations against different respondents that involved certain "common tasks" by the Commission.
[44] The Commission's Bill of Costs excludes any time related to settlement discussions and negotiations, and costs incurred between December 2, 2024, and July 31, 2025. As a result, the Commission submits the costs sought in this matter reflect a substantial discount compared to the full costs incurred.
[45] I am satisfied that it is appropriate to make an order for costs for the first element of the costs sought by the Commission, but not the second element. I exclude the request for an apportionment of "common task" costs among the nine cases pursued by the Commission. Despite the Commission's claim that the costs sought have been substantially discounted already, I have insufficient facts to determine the reasonableness of the second element of the costs sought, in total or in the method of apportionment.
[46] Accordingly, I will order that Namburi pay to the Commission costs of $4,328.75.
[47] For these reasons, it is in the public interest to order, and I will order that:
a. Namburi shall, on or before April 9, 2026, resign any positions he holds as a director or officer of any issuer, pursuant to paragraph 7 of s. 127(1) of the Act;
b. Namburi is prohibited from becoming or acting as a director or officer of any issuer until April 7, 2037, pursuant to paragraph 8 of s. 127(1) of the Act;
c. Namburi shall pay an administrative penalty of $7,500 for his failure to comply with Ontario securities law, pursuant to paragraph 9 of s. 127(1) of the Act; and
d. Namburi shall pay to the Commission $4,328.75 for costs of the investigation and hearing, pursuant to s. 127.1 of the Act.
Dated at Toronto this 9th day of March, 2026
{1} (2022), 45 OSCB 8685; https://www.capitalmarketstribunal.ca/sites/default/files/2022-10/rad_20221007_vrk-forex.pdf
{2} (2025), 48 OSCB 9091; https://www.capitalmarketstribunal.ca/sites/default/files/2025-10/rad_20251029_namburi.pdf
{3} Exhibit 1, Affidavit of Paul Baik sworn December 4, 2025, (Baik Affidavit)
{4} Exhibit 2, Affidavit of Julia Ho sworn December 4, 2025 (Ho Affidavit)
{5} File No. 2019-40
{6} Statutory Powers Procedure Act, RSO 1990 c S.22, s 7(2); Capital Markets Tribunal Rules of Procedure, subrule 24(3)
{7} RSO 1990, c S.5
{8} 2026 ONCMT 6 at paras 20-22
{9} Act, s 1.1; Money Gate Mortgage Investment Corporation (Re), 2021 ONSEC 10 at para 7
{10} Cartaway Resources Corp (Re), 2004 SCC 26 at paras 58-62
{11} Belteco Holdings Inc (Re), (1998) 21 OSCB 7743 at 7746; Erikson v Ontario (Securities Commission), 2003 CanLII 2451 (ON SC) (Erikson) at para 58; MCJC Holdings Inc (Re) (2002), 25 OSCB 1133 at 1135
{12} MOAG Copper Gold Resources Inc (Re), 2020 ONSEC 29 (MOAG) at para 15; Threegold Resources Inc (Re), 2021 ONSEC 30 at para 67
{13} Stinson (Re), 2023 ONCMT 50 at para 18; Da Silva (Re), 2012 ONSEC 32 at paras 8-9
{14} Wing (Re), 2018 ONSEC 25 at para 1
{15} Erikson at paras 55-56
{16} MOAG at para 15
{17} Quadrexx Hedge Capital Management Ltd (Re), 2018 ONSEC 3 at para 59
{18} Valentine (Re), 2024 ONCMT 21 (Valentine) at para 62
{19} Dunn (Re), 2023 BCSECCOM 251; Re Malone, 2016 BCSECCOM 334; Re Jardine, 2016 BCSECCOM 82; Alexander (Re), 2007 BCSECCOM 773; Re Cadman, 2015 ABASC 836
{20} Valentine at paras 45 and 48-63
Notice of Ministerial Approval of Amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure, National Instrument 81-102 Investment Funds, National Instrument 81-106 Investment Fund Continuous Disclosure, and National Instrument 81-107 Independent Review Committee for Investment Funds
On December 8, 2025, the Ontario Securities Commission (the Commission) adopted amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure, National Instrument 81-102 Investment Funds, National Instrument 81-106 Investment Fund Continuous Disclosure, and National Instrument 81-107 Independent Review Committee for Investment Funds (collectively, the Rule Amendments). On the same date, the Commission also adopted changes to the Commentary in National Instrument 81-107 Independent Review Committee for Investment Funds (the Policy Changes).
The above material was published on January 22, 2026 in the Bulletin. See (2026), 49 OSCB 761.
On March 6, 2026 the Minister of Finance approved the Rule Amendments.
The text of the Rule Amendments is published in Chapter B.5 of this Bulletin.
The Rule Amendments and the Policy Changes have an effective date of April 22, 2026.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Securities Act s. 88 -- Cease to be a reporting issuer in BC -- The securities of the issuer are beneficially owned by more than 50 persons and are not traded through any exchange or market; following an arrangement, all of the issuer's common shares were acquired by another company that is a reporting issuer and in compliance with its continuous disclosure obligations; the issuer has convertible securities that are beneficially owned by more than 50 persons; the convertible securities are exercisable for securities of the acquirer or redeemable based on the value of the shares of the acquirer; the issuer is not required under the terms of the convertible securities to provide any continuous disclosure to the holders of the convertible securities or to remain a reporting issuer.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- The issuer ceased to be a reporting issuer under securities legislation.
Securities Act, R.S.B.C. 1996, c. 418, s. 88.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
Citation: 2026 BCSECCOM 57
February 20, 2026
¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
(a) the British Columbia Securities Commission is the principal regulator for this application,
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, and
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
¶ 2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
¶ 3 This order is based on the following facts represented by the Filer:
1. the Filer is a reporting issuer under the laws of British Columbia, Ontario, and Alberta;
2. the Filer was incorporated under the Business Corporations Act (British Columbia) (the BCBCA);
3. the Filer's head office is located in Vancouver, British Columbia;
4. the common shares in the capital of the Filer (the Filer Shares) traded on the Canadian Securities Exchange (the CSE) under the symbol NCLR, and on the OTC under the symbol BURCF;
5. immediately prior to the Effective Time (as defined below), the Filer had the following issued and outstanding securities:
(a) 27,300,679 Filer Shares;
(b) stock options exercisable to purchase 917,211 Filer Shares (the Filer Options); and
(c) common share purchase warrants to acquire 7,373,865 Filer Shares (the Filer Warrants).
6. there are an aggregate of 4,664,999 Filer Warrants exercisable at $0.20 per share expiring January 22, 2028 (the 2025 Filer Warrants) and an aggregate of 2,708,866 Filer Warrants exercisable at $0.25 per share expiring April 11, 2026 (the 2023 Filer Warrants);
7. the 2025 Filer Warrants are beneficially held by 25 holders, with 13 holders in British Columbia, 7 holders in Alberta, 3 holders in Ontario, 1 holder in the United States and 1 holder in the Bahamas;
8. the 2023 Filer Warrants are beneficially held by a maximum of 33 holders, with 22 holders in British Columbia, 7 holders in Alberta, 1 holder in Ontario, 1 holder in the U.S., 1 holder in Germany and 1 holder in Monaco;
9. under the terms and conditions of an arrangement agreement dated June 25, 2025, between the Filer, Nexus Uranium Corp. (Nexus) and Blade Resources Inc., effective at 12:01 a.m. (Vancouver Time) on September 16, 2025 (the Effective Time), Nexus acquired all of the issued and outstanding Filer Shares by way of a statutory plan of arrangement under the BCBCA (the Arrangement);
10. in connection with the Arrangement, and in accordance with an interim order (the Interim Order) granted by the Supreme Court of British Columbia (the Court) on August 1, 2025, a notice of special meeting (the Meeting) of holders of Filer Shares (the Filer Shareholders) and management information circular dated August 1, 2025 (the Information Circular) was delivered to the Filer Shareholders entitled to vote at the Meeting, which took place on September 4, 2025, to consider the Arrangement;
11. the special resolution in respect of the Arrangement was approved by the requisite majority of the Filer Shareholders in accordance with the Interim Order;
12. on September 9, 2025, a final order approving the Arrangement was granted by the Court;
13. the Filer disclosed in the Information Circular that after the Effective Time it would make an application to seek to have the Filer cease to be a reporting issuer in each of the jurisdictions of Canada in which it is a reporting issuer;
14. Nexus is a corporation existing under the BCBCA, and its authorized share capital consists of an unlimited number of common shares (the Nexus Shares), which are listed on the CSE under the symbol NEXU and are quoted on the OTCQB under the symbol GIDMF;
15. under the Arrangement:
(a) Nexus acquired all of the Filer Shares;
(b) all Filer Options were exchanged into stock options of Nexus exercisable to acquire Nexus Shares; and
(c) all holders of Filer Warrants became entitled to receive, and Nexus became obligated to issue upon the exercise of such Filer Warrants, based on the Exchange Ratio, the number of Nexus Shares as stipulated under the Arrangement.
16. the Filer Warrants do not provide the holders thereof with voting rights in respect of Nexus;
17. the Filer Warrants are not listed on any stock exchange for trading and will not be listed;
18. the Filer is not required to remain a reporting issuer in any jurisdiction under any contractual arrangement between the Filer and the holders of the Filer Warrants, and no consents or approvals were required from the holders of the Filer Warrants;
19. in connection with the Arrangement, additional Nexus Shares were authorized for issuance upon exercise of the Filer Warrants;
20. the Filer Warrants are only exercisable for Nexus Shares and holders thereof are no longer entitled to receive Filer Shares;
21. each Filer Warrant will continue to be governed by and be subject to the terms of the applicable warrant certificate, subject to any supplemental documents issued by Nexus to holders of the Filer Warrant and the payment of the corresponding portion of the exercise price with each of them;
22. the Filer is not required under the terms of the applicable warrant certificate to provide any continuous disclosure to holders of the Filer Warrants;
23. immediately upon the completion of the Arrangement, the Filer became a wholly-owned subsidiary of Nexus;
24. the Filer has been delisted from the CSE effective as of the close of trading on September 16, 2025 and the Filer Shares no longer trade on the OTC;
25. Nexus is a reporting issuer in each of Alberta, British Columbia, and Ontario, and as such, Nexus is subject to the continuous disclosure requirements that are relevant to holders of Filer Warrants, as such holders are entitled to receive Nexus Shares upon exercise or settlement of such securities, as applicable;
26. Nexus is not in default of securities legislation in any jurisdiction;
27. the Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets;
28. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
29. the Filer is applying for an order that it has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is currently a reporting issuer;
30. the Filer is not in default of its obligations as a reporting issuer under the securities legislation of any jurisdiction, except that the Filer did not file its annual financial statements and accompanying management's discussion and analysis for the year ended May 31, 2025, as well as its interim financial statements and accompanying management's discussion and analysis for the interim periods ended August 31, 2025 and November 30, 2025, respectively (collectively, the Filings) by the September 29, 2025 , October 30, 2025 and January 29, 2026 deadlines for the Filings, respectively;
31. the deadlines to file the Filings did not arise until after the completion of the Arrangement;
32. the Filer is not eligible to use the simplified procedure under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications (NP 11-206) because of its failure to make the Filings and because the outstanding Filer Warrants are not beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada;
33. the Filer is not eligible to use the modified procedure under section 20 of NP 11-206 because, among other things, it is not incorporated or organized under the laws of a foreign jurisdiction;
34. the Filer has no intention to seek public financing by way of an offering of securities and has no intention of issuing any securities; and
35. upon the granting of the Order Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction in Canada.
¶ 4 Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.
OSC File #: 2025/0587
One Bullion Limited (formerly, Imperial Ginseng Products Ltd.) -- s. 1(11)(b)
Paragraph 1(11)(b) -- Order that the issuer is a reporting issuer for the purposes of Ontario securities law -- Issuer is already a reporting issuer in British Columbia and Alberta -- Issuer's securities listed for trading on the TSX Venture Exchange -- Continuous disclosure requirements in British Columbia and Alberta are substantially the same as those in Ontario -- Issuer has a significant connection to Ontario.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(11)(b).
March 3, 2026
(Paragraph 1(11)(b))
UPON the application of the Filer to the Ontario Securities Commission (the "Commission") for an order (the "Order") pursuant to paragraph 1(11)(b) of the Act that, for the purposes of Ontario securities law, the Filer is a reporting issuer in Ontario;
AND UPON considering the application and the recommendation of the staff of the Commission;
AND UPON the Filer having represented to the Commission as follows:
1. The Filer is a corporation formed on April 6, 1989 and exists under the laws of the Province of British Columbia.
2. The Filer is a reporting issuer in British Columbia and Alberta and is not a reporting issuer in any other jurisdiction. The Filer became a reporting issuer in British Columbia on December 28, 1989, and in Alberta in 1999.
3. The Filer's current principal regulator is the British Columbia Securities Commission (the "BCSC").
4. The head office of the Filer is located at 130 Spadina Avenue, Suite 401, Toronto, Ontario, M5V 2L4.
5. Effective December 16, 2025, the Filer completed a business combination (the "Transaction") with a private Ontario company named One Bullion Limited ("OBL") pursuant to the terms of a merger agreement dated September 11, 2024, as amended between the Filer, OBL and 1000975360 Ontario Inc. ("NewCo").
6. Pursuant to the Transaction, amongst other matters, (i) the Filer consolidated its issued and outstanding common shares (each, a "Filer Share") on the basis of one (1) "new" Filer Share for every 1.25 "old" Filer Shares outstanding (the "Consolidation"); (ii) the Filer changed its name to "One Bullion Limited"; and (iii) OBL amalgamated Newco (with a wholly-owned subsidiary of the Filer) to form a new amalgamated entity which continued as a wholly-owned subsidiary of the Filer, in connection with which each holder of a common share of OBL exchanged such common shares for post-Consolidation Filer Shares on a 1:1 basis.
7. The authorized share capital of the Filer consists of an unlimited number of common shares and an unlimited number of preferred shares, of which 192,022,830 post-Consolidation Filer Shares are issued and outstanding as of the date hereof.
8. Prior to the closing of the Transaction, the Filer Shares were listed on TSX Venture Exchange ("TSXV") under the symbol "IGP". Following the completion of the Transaction, the Filer Shares resumed trading on TSXV as a Tier 2 Mining Issuer under the trading symbol "OBUL".
9. The Filer is not in default of any of the rules, regulations or policies of the TSXV.
10. The Filer does not appear on the lists of defaulting reporting issuers maintained pursuant to the Securities Act (British Columbia) (the "BC Act") or the Securities Act (Alberta) (the "AB Act") and is not in default of any requirement of either the BC Act or the AB Act or the rules and regulations made under either statute.
11. The Filer is subject to the continuous disclosure requirements of the BC Act and the AB Act. The continuous disclosure requirements of the BC Act and the AB Act are substantially the same as the continuous disclosure requirements under the Act.
12. The continuous disclosure documents filed by the Filer under the BC Act and the AB Act are available on SEDAR+. The Filer's first electronic filing on SEDAR+ occurred on July 28, 1997.
13. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 -- Issuers Quoted in the U.S. Over-the-Counter Markets.
14. Pursuant to the policies of the TSXV, a listed issuer, which is not otherwise a reporting issuer in Ontario, must assess whether it has a "Significant Connection to Ontario" (as defined in Policy 1.1 of the TSX Venture Exchange Corporate Finance Manual) and, upon becoming aware that it has a Significant Connection to Ontario, promptly make a bona fide application to the Commission to be designated a reporting issuer in Ontario.
15. The Filer has determined that it has a significant connection to Ontario in accordance with the policies of the TSXV. Specifically, a majority of its directors are residents of Ontario. Accordingly, the OSC is the appropriate body to serve as the Filer's principal regulator, pursuant to section 3.4(4) of National Instrument 11-202 Process for Prospectus Reviews in Multiple Jurisdictions.
16. There have been no penalties or sanctions imposed against the Filer by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority, the Filer has not entered into a settlement agreement with a Canadian securities regulatory authority and the Filer has not been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision.
17. No director or officer of the Filer, nor any shareholder of the Filer holding sufficient securities of the Filer to affect materially the control of the Filer has:
(a) been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority;
(b) entered into a settlement agreement with a Canadian securities regulatory authority; or
(c) been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision.
18. No director or officer of the Filer, nor any shareholder of the Filer holding sufficient securities of the Filer to affect materially the control of the Filer, is or has been subject to:
(a) any known ongoing or concluded investigations by: (i) a Canadian securities regulatory authority; or (ii) a court or regulatory body, other than a Canadian securities regulatory authority, that would be likely to be considered important to a reasonable investor making an investment decision; or
(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or appointment of a receiver, receiver manager or trustee, within the preceding 10 years.
19. Except as noted below, no directors or officers of the Filer, nor any shareholder of the Filer holding sufficient securities to materially affect the control of the Filer, is or has been at the time of such event, an officer or director of any other issuer which is or has been subject to:
(a) any cease trade order or similar order, or order that denied access to any exemptions under Ontario securities law, for a period more than 30 consecutive days, within the preceding 10 years; or
(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.
Arnoldus Brand was the CFO and Chairman of Gratomic Inc. from December 2017 to August 2025. Since May 7, 2025, Gratomic Inc. has been subject to a failure-to-file cease trade order, as a result of its failure to file financial statements for the financial year ended December 31, 2024, the related management discussion and analysis and the certification of annual filings. The failure-to-file cease trade order is still in effect and has not been lifted.
20. After the Filer becomes a reporting issuer in Ontario, the Commission will be the Filer's principal regulator.
21. Upon granting of this Order, the Filer will amend its SEDAR+ profile indicating that the Commission is its principal regulator.
AND UPON the Commission being satisfied that granting this Order would not be prejudicial to the public interest;
IT IS HEREBY ORDERED pursuant to paragraph 1(11)(b) of the Act that the Filer is a reporting issuer for the purposes of Ontario securities law.
DATED at Toronto, Ontario on this 3rd day of March 2026.
OSC File #: 2025/0576
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- The issuer ceased to be a reporting issuer under securities legislation.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
Citation: Re NuVista Energy Ltd., 2026 ABASC 22
February 19, 2026
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
(a) the Alberta Securities Commission is the principal regulator for this application;
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador; and
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. the Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets;
2. the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide;
3. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
4. the Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer; and
5. the Filer is not in default of securities legislation in any jurisdiction.
Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.
OSC File #: 2026-53
Algonquin Capital Corporation and The Top Funds
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief from the investment fund conflict-of-interest investment restrictions in paragraphs 111(2)(b) and (c), and subsection 111(4) of the Securities Act (Ontario), the related issuer reporting requirement in paragraph 117(1) of the Securities Act (Ontario), the client consent requirement in paragraph 13.5(2)(a) of NI 31-103, and the fund-of-fund restrictions in paragraphs 2.5(2)(a), (a.1), and (c) of NI 81-102 -- to permit public and private investment funds to invest in related underlying investment funds that are not subject to NI 81-102 and may not be reporting issuers -- subject to conditions.
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 111(2)(b), 111(2)(c)(i) and (ii), 111(4), 113, and 117(1).
National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 13.5(2)(a) and 15.1.
National Instrument 81-102 Investment Funds, ss. 2.5(2)(a), (a.1), and (c), and 19.1.
March 4, 2026
The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of each of the Filer, Algonquin Fixed Income 2.0 Fund (Algonquin Fixed Income), Algonquin Debt Strategies Fund LP (Algonquin Debt, together with Algonquin Fixed Income, the Existing Top Funds) and one or more investment funds under the securities legislation of the principal regulator (the Legislation) and which are established, advised and managed by the Filer, in the future (the Future Top Funds, and together with the Existing Top Funds, the Top Funds) for a decision under the Legislation:
1. exempting the Top Funds from the following restrictions in the Legislation:
(a) paragraph 111(2)(b), which prohibits an investment fund from knowingly making an investment in a person or company in which the investment fund, alone or together with one or more related investment funds, is a substantial security holder;
(b) paragraph 111(2)(c), which prohibits an investment fund from knowingly making an investment in an issuer in which any of the following has a significant interest:
(i) any officer or director of the investment fund, its management company or distribution company or an associate of any of them, or
(ii) any person or company who is a substantial security holder of the investment fund, its management company or its distribution company, and
(c) paragraph 111(4), which prohibits an investment fund, its management company or its distribution company from knowingly holding an investment described in paragraph (a) or (b) above
(collectively, the Related Issuer Relief);
2. exempting the Filer and each affiliate that acts as manager of a Top Fund from paragraph 117(1) of the Legislation, being the requirement to prepare a report in accordance with the requirements of the Legislation of every transaction by a Top Fund involving a purchase of securities from, or sale of securities to, any related person or company (the Reporting Relief);
3. exempting the Filer and each affiliate that is a registered adviser from the prohibition in paragraph 13.5(2)(a) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) against knowingly causing a Top Fund to invest in securities of any issuer in which a responsible person or an associate of a responsible person is a partner, officer or director, unless the fact is disclosed to the client and the written consent of the client to the investment is obtained before the purchase (the Consent Requirement Relief) to permit each Top Fund to invest a portion of its assets in an Underlying Fund (as defined below); and
4. exempting Algonquin Fixed Income and each Future Top Fund managed by the Filer that is a reporting issuer subject to National Instrument 81-102 Investment Funds (NI 81-102) (collectively, the Public Top Funds), from the restrictions in paragraphs 2.5(2)(a), 2.5(2)(a.1) and 2.5(2)(c) of NI 81-102 that prohibit an investment fund from investing in securities of an investment fund that is not subject to NI 81-102 and is not a reporting issuer in any Jurisdiction (the Fund-of-Fund Relief),
to permit each Top Fund to invest a portion of its assets in
(i) an investment fund organized as a trust that is managed by the Filer or one of its affiliates and has been organized under the laws of the province of Ontario and is not a reporting issuer in any province or territory of Canada (the Initial Underlying Fund), and/or
(ii) any other future investment fund that is, or will be, managed by the Filer or one of its affiliates that will have similar non-traditional investment strategies (the Future Underlying Fund and, together with the Initial Underlying Fund, the Underlying Funds or each an Underlying Fund).
The Related Issuer Relief, the Reporting Relief, the Consent Requirement Relief, and the Fund-of-Fund Relief are collectively referred to in this Application, as the Exemption Sought.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Québec, Prince Edward Island, Saskatchewan and Yukon (together with Ontario, the Jurisdictions).
Unless otherwise defined herein, terms in this decision have the respective meanings given to them in National Instrument 14-101 Definitions, NI 81-102, National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107) and MI 11-102.
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation existing under the laws of Ontario with its head office located in Toronto, Ontario.
2. The Filer is registered with the Ontario Securities Commission in the categories of investment fund manager (the IFM), portfolio manager, and exempt market dealer. The Filer is also registered as an exempt market dealer in Alberta, British Columbia, Manitoba and Nova Scotia and an exempt market dealer and investment fund manager in Québec and Newfoundland and Labrador.
3. The Filer or an affiliate of the Filer is the IFM of the Existing Top Funds and Initial Underlying Fund, and the Filer or an affiliate of the Filer will be the IFM of the Future Top Funds and Future Underlying Funds. To the extent that the Filer or an affiliate of the Filer is the IFM of any Future Top Fund or Future Underlying Fund, the representations set out in this decision will apply to the same extent to such Future Top Fund or Future Underlying Fund.
4. The Filer or an affiliate of the Filer is, or will be, a "responsible person" (as defined in NI 31-103) of each Top Fund and each Underlying Fund.
5. The Filer is not a reporting issuer in any jurisdiction and is not in default of securities legislation of any jurisdiction of Canada.
The Top Funds
6. The securities of the Top Funds are, or will be, (a) distributed to investors pursuant to a prospectus prepared in accordance with National Instrument 41-101 General Prospectus Requirements or National Instrument 81-101 Mutual Fund Prospectus Disclosure, as applicable; or (b) sold to investors in one or more Jurisdictions pursuant to an exemption from the prospectus requirement under National Instrument 45-106 Prospectus Exemptions (NI 45-106) and/or the Legislation.
7. The securities of the Public Top Funds are, or will be, qualified for distribution in one or more Jurisdictions.
8. Each Public Top Fund is, or will be, a reporting issuer under the securities legislation of one or more Jurisdictions.
9. Each Top Fund that is not a reporting issuer (a Private Top Fund) has, or will have, an offering memorandum or statement of investment policies and guidelines, which is provided to investors.
10. None of the Private Top Funds are, or will be, reporting issuers under the securities legislation of one or more Jurisdictions.
11. The Public Top Funds are or will be organized under the laws of Ontario as an investment fund and is/or will be a "mutual fund" or an "alternative mutual fund" for the purposes of the Legislation.
12. The Public Top Funds are subject to NI 81-107 and the manager of the Public Top Funds has established an independent review committee (the IRC) in order to review conflict of interest matters pertaining to its management of the Top Funds as required by NI 81-107.
13. Each Top Fund may wish to invest in securities of the Underlying Funds, provided the investment is consistent with the Top Fund's investment objectives and strategies.
14. Each Top Fund will comply with the investment restrictions and practices provided in Part 2 of NI 81-102 applicable to "alternative mutual funds" in making any investment in an Underlying Fund and, in particular, will comply with the concentration restriction in section 2.1, the control restriction in section 2.2 and the illiquid assets restriction in section 2.4. Each Top Fund will treat securities of the Underlying Funds as illiquid assets for these purposes.
15. The Top Funds and Underlying Funds subject to National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) will prepare annual audited financial statements and interim unaudited financial statements in accordance with NI 81-106 and will otherwise comply with the requirements of NI 81-106 applicable to them.
16. Each Top Fund qualifies to invest in securities of the Underlying Funds pursuant to applicable exemptions from the prospectus requirement under NI 45-106 and/or the Legislation.
17. The Existing Top Funds are not in default of securities legislation of any Jurisdiction.
18. The Filer is or will be the investment fund manager and the portfolio manager of the Top Funds.
The Underlying Funds
19. The Initial Underlying Fund is not currently a reporting issuer in any province or territory of Canada. The Initial Underlying Fund may become a reporting issuer in any province or territory of Canada, and the Future Underlying Funds may be reporting issuers in any province or territory of Canada.
20. Any Underlying Fund will be formed under the laws of the Jurisdictions.
21. Securities of the Underlying Funds will be offered to qualified investors, including the Top Funds, on a private placement basis pursuant to available exemptions from the prospectus requirements under Canadian securities legislation.
22. Securities of the Initial Underlying Fund are, and any Future Underlying Funds will be, distributed solely to investors pursuant to exemptions from the prospectus requirements in accordance with NI 45-106 and/or the Legislation, as applicable.
23. Each Initial Underlying Fund has an offering memorandum which is provided to investors.
24. Each Underlying Fund produces, or will produce, audited financial statements on an annual basis, in accordance with generally accepted accounting principles with a qualified auditing firm as the auditor of those financial statements.
25. The Filer is the investment manager and portfolio manager of the Initial Underlying Fund and will be the investment manager and the portfolio manager of each of the other Underlying Funds.
26. The investment objective of the Initial Underlying Fund is to generate positive absolute returns with an emphasis on capital preservation and with a low correlation to traditional equity and fixed income markets. The Investment Manager will seek to achieve this objective by investing primarily in income producing securities and will focus on corporate debt. The Initial Underlying Fund may also invest in convertible debt securities, fixed-income securities of government agencies or of supranational agencies, floating rate securities, trusts, corporate bonds and loans, exchange-traded funds, partnerships, and preferred shares, as well as derivative contracts for investment or hedging purposes.
27. No Top Fund will actively participate in the business or operations of the Underlying Fund.
The Future Underlying Funds
28. Future Underlying Funds may be structured as limited partnerships, trusts or corporations governed by the laws of any of the Jurisdictions.
29. The portfolio of each Underlying Fund consists or will consist primarily of publicly traded securities, debt instruments and derivatives. No Underlying Fund holds, or will hold, more than 10% of its NAV in illiquid assets (as defined in NI 81-102).
30. Each Future Underlying Fund will be an "investment fund" as defined under the Legislation and will not be subject to NI 81-102.
31. The Future Underlying Funds may or may not be reporting issuers in any of the Jurisdictions.
Investments by Top Funds in the Underlying Funds
32. An investment by a Top Fund in an Underlying Fund will only be made if the investment is compatible with the investment objectives of the Top Fund.
33. The Filer believes that an investment by a Top Fund in an Underlying Fund will provide the Top Fund with an efficient and cost-effective way for the Top Funds to obtain exposure to fixed income securities (Target Securities) which are generally not available in odd lots without incurring material additional transaction costs. It will also permit the Filer, or an affiliate of the Filer, to manage a single portfolio of Target Securities for both a Top Fund and an Underlying Fund in a single investment vehicle structure.
34. Managing a single pool of assets provides economies of scale, allows the Top Funds to achieve their investment objectives in a cost-efficient manner and will not be detrimental to the interest of other securityholders of an Underlying Fund. This structure is also expected to increase the asset base of the Underlying Funds, which is expected to result in additional benefits to unitholders of the Underlying Funds, including more favourable pricing and transaction costs on portfolio trades, increased access to investments when there is a minimum subscription or purchase amount and better economies of scale through greater administrative efficiency.
35. The Filer believes that a meaningful allocation to Target Securities provides Top Fund investors with unique diversification opportunities and represents an appropriate investment tool for the Top Fund that has not been readily available in the past.
36. The amounts invested from time to time in an Underlying Fund by one or more of the Top Funds may exceed 20% of the outstanding voting securities of any single Underlying Fund. Accordingly, each Top Fund could, either alone or together with other Top Funds, become a "substantial security holder" (as defined in the Legislation) of an Underlying Fund.
37. Investments by a Top Fund in an Underlying Fund will be effected at an objective price. The Filer's policies and procedures provide that an objective price, for this purpose, will be the NAV per security of the applicable class or series of the Underlying Fund.
38. Each Public Top Fund is, or will be, valued and redeemable daily and each Private Top Fund, is, or will be, valued and redeemable at least monthly and the Underlying Funds may be potentially subject to redemption limitations including redemption notice periods, early redemption penalties and other restrictions on redemptions in a given period of time (collectively, Redemption Limitations).
39. An investment by a Top Fund in an Underlying Fund will only be made if such investment represents the business judgment of a responsible person uninfluenced by considerations other than the best interests of that Top Fund.
40. The Filer does not anticipate that any fees or sales charges would be incurred, directly or indirectly, by a Top Fund with respect to an investment in an Underlying Fund that, to a reasonable person, would duplicate a fee payable by the Top Fund to the Filer or its investors.
41. In respect of an investment by a Top Fund in an Underlying Fund, no management fees or incentive fees will be payable by a Top Fund that, to a reasonable person, would duplicate a fee payable by the Underlying Fund for the same service.
42. Where applicable, a Top Fund's investment in an Underlying Fund will be disclosed to investors, and in respect of Public Top Funds, this includes that Public Top Fund's quarterly portfolio holding reports, financial statements, and fund facts documents.
43. Where an investment is made by a Public Top Fund in an Underlying Fund, the annual and interim management reports of fund performance for the Public Top Fund will disclose the name of the related Underlying Fund. The Top Funds and Underlying Funds subject to NI 81-106 will prepare annual audited financial statements and interim unaudited financial statements in accordance with NI 81-106 and will otherwise comply with the requirements of NI 81-106 applicable to them.
44. Where an investment is made by a Top Fund in an Underlying Fund, the records of portfolio transactions maintained by the Top Fund will include, separately for every portfolio transaction effected for the Top Fund by the Filer or through any affiliate of the Filer, the name of the related person in which an investment is made, being an Underlying Fund.
45. The prospectus of each Public Top Fund will disclose in the next renewal or amendment thereto following the date of a decision evidencing the Exemption Sought, the fact that the Public Top Fund may invest, directly or indirectly, in an Underlying Fund, which are investment funds managed by the Filer or an affiliate of the Filer.
46. The offering memorandum or statement of investment policies and guidelines, where available, or other disclosure document of a Private Top Fund will disclose in the next update thereto following the date of the decision granting the Exemption Sought, the fact that the Private Top Fund may invest, directly or indirectly, in one or more Underlying Funds, which are collective investment vehicles managed by the Filer or an affiliate of the Filer as well as include the Additional Disclosure (as defined below).
47. Each Underlying Fund produces, or will produce, audited financial statements on an annual basis, in accordance with generally accepted accounting principles with a qualified auditing firm as the auditor of those financial statements.
48. For any Public Top Fund, subject to compliance with section 2.2 of NI 81-102, the amount invested from time to time in an Underlying Fund by a Public Top Fund, together with one or more Top Funds, may exceed 20% of the outstanding voting securities of the Underlying Fund. This may result by reason of a group of Top Funds providing initial investments into the Underlying Funds on the start-up of the Underlying Fund. As a result, each Top Fund could, together with one or more other Top Funds, become a "substantial security holder" of an Underlying Fund within the meaning of the Legislation, further to which the Top Fund would be prohibited under the Legislation from knowingly purchasing and holding securities of an Underlying Fund. The Top Funds are, or will be, "related investment funds", as defined in the Legislation by virtue of common management by the Filer or by an affiliate of the Filer.
49. In addition, an officer or director of the Filer or of an affiliate of the Filer may have a "significant interest" in an Underlying Fund and/or a person or company who is a substantial security holder of the Top Fund, the Filer or an affiliate of the Filer may have a "significant interest" in the Underlying Fund within the meaning of the Legislation, which would prohibit the Top Fund from investing in the Underlying Fund.
50. Paragraph 13.5(2)(a) of NI 31-103 prohibits the Filer or an affiliate that acts as portfolio manager of a Top Fund from knowingly causing a Top Fund to invest in an Underlying Fund that is structured as a limited partnership, where the general partner of the Underlying Fund is an affiliate of the Filer and the Filer or its affiliate is a responsible person of the Top Funds unless (i) this fact is disclosed to the client and (ii) the written consent of the client to the purchase is obtained before the purchase. It is impractical for the Filer to obtain the prior written consent from each investor in the Top Fund, given the widely held nature of the Top Funds.
51. As the Filer is a registered firm under NI 31-103, the assets of the Initial Top Fund and the Future Top Funds are, or will be, held by an entity that meets the qualifications of a qualified custodian under NI 31-103 and, in respect of Top Funds that are not reporting issuers, meets the qualifications set out in section 6.2 (for assets held in Canada) or section 6.3 (for assets held outside Canada) of NI 81-102, except that its audited financial statements may not have been made public. The assets of the Underlying Funds are, or will be, held by an entity that meets the qualifications of a qualified custodian under NI 31-103 and meets the qualifications set out in section 6.2 (for assets held in Canada) or section 6.3 (for assets held outside Canada) of NI 81-102, except that its audited financial statements may not have been made public.
52. Absent the Exemption Sought,
(a) each Top Fund would be prohibited from (i) becoming a substantial securityholder of an Underlying Fund, alone or together with other Top Funds, and (ii) investing in an Underlying Fund in which an officer or director of the Filer or of an affiliate of the Filer has a significant interest or in which a person or company who is a substantial securityholder of the Top Fund or the Filer has a significant interest;
(b) each Public Top Fund would be prohibited from purchasing or holding securities of an Underlying Fund because such Underlying Fund (i) is not, or will not be, subject to NI 81-102, and (ii) is not, or will not be, a reporting issuer in the Jurisdictions; and
(c) the Filer, or an affiliate of the Filer acting as the management company (as defined in the Legislation) of the Top Funds would be required to file a report of every purchase and sale of securities of the Underlying Funds by the Top Funds or every purchase or sale effected by the Top Funds through any related person or company with respect to which the related person or company received a fee either from the Top Funds or from the other party to the transaction or from both within 30 days after the end of the month in which such purchase or sale occurs (the Reporting Requirement).
53. It would be costly and time-consuming for the Top Funds to comply with the Reporting Requirement.
54. The Filer considers that an investment by the Top Funds in the Underlying Funds raises "conflict of interest" matters within the meaning of NI 81-107 and, therefore, if the Exemption Sought is granted, the manager of the Public Top Funds will request approval from the IRC of the Public Top Funds to permit the investment of the Public Top Funds in the Underlying Funds, including by way of standing instructions. No such investments will be made until the IRC provides its approvals under section 5.2 of NI 81-107. The manager of the Public Top Funds will comply with section 5.1 of NI 81-107 and the manager of the Public Top Funds and the IRC of the Public Top Funds will comply with section 5.4 of NI 81-107 for any standing instructions the IRC provides in connection with the transactions. If the IRC becomes aware of an instance where the manager of a Public Top Fund did not comply with the terms of any decision evidencing the Exemption Sought, or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Public Top Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the Jurisdiction under which the Public Top Fund is organized.
55. Subsection 6.2(3) of NI 81-107 provides an exemption for investment funds from the "investment fund conflict of interest investment restrictions" (as defined in NI 81-102) for purchases of related issuer securities if the purchase is made on an exchange. However, the exemption in subsection 6.2(3) of NI 81-107 does not apply to purchases of non-exchange- traded securities and, therefore, does not apply to purchases of an Underlying Fund by a Top Fund.
56. Investments in Underlying Funds are considered illiquid investments under NI 81-102 and, therefore, are not permitted to exceed 10% of the NAV of a Top Fund. Such investments are included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102 for a Public Top Fund. NI 81-102 allows holdings in illiquid investments so long as the aggregate exposure to illiquid investments is within the thresholds of the rule. The Filer has its own liquidity policy and manages each Top Fund's liquidity prudently under the policy. Given the readily available liquidity of the remainder of each Top Fund's investment portfolio, the Filer believes that the risk of a Top Fund needing to liquidate its investment in these illiquid assets when markets are under stress or in other environments where liquidity may be reduced is remote.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:
(a) the investment by a Top Fund in an Underlying Fund will be compatible with the investment objective and strategy of such Top Fund and included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102;
(b) at the time of the purchase by a Top Fund of securities of an Underlying Fund, either (A) the Underlying Fund holds no more than 10% of its NAV in securities of other investment funds, or (B) the Underlying Fund:
(i) has adopted a fundamental investment objective to track the performance of another investment fund or similar investment product;
(ii) purchases or holds securities of investment funds that are "money market funds" (as defined in NI 81-102); or
(iii) purchases or holds securities that are "index participation units" (as defined in NI 81-102) issued by an investment fund;
(c) in respect of an investment by a Top Fund in an Underlying Fund, no sales or redemption fees will be paid as part of the investment in the Underlying Fund, unless the Top Fund redeems its securities of the Underlying Fund during a Redemption Limitation, in which case a fee may be payable by the Top Fund;
(d) in respect of an investment by a Top Fund in an Underlying Fund, no management fees or incentive fees will be payable by a Top Fund that, to a reasonable person, would duplicate a fee payable by an Underlying Fund for the same service;
(e) the securities of an Underlying Fund held by a Top Fund will not be voted at any meeting of the security holders of the Underlying Fund, except that the Top Fund may arrange for the securities of the Underlying Fund it holds to be voted by the beneficial holders of securities of the Top Fund;
(f) no Top Fund will actively participate in the business or operations of an Underlying Fund;
(g) where applicable, a Top Fund's investment in an Underlying Fund will be disclosed to investors in such Top Fund's quarterly portfolio holding reports, financial statements, and fund facts or ETF facts documents;
(h) where applicable, the prospectus of a Public Top Fund discloses, or will disclose, in the next renewal or amendment thereto following the date of this decision, the fact that the Top Fund may invest in an Underlying Fund, which is an investment fund managed by the Filer or an affiliate;
(i) the offering memorandum or statement of investment policies and guidelines, where available, or other disclosure document of a Private Top Fund, will be provided to each new investor in a Private Top Fund prior to their purchase of securities of the Private Top Fund, and will disclose the following information (the Additional Disclosure) in the next update thereto following the date of this decision:
(i) that the Private Top Fund may purchase securities of one or more Underlying Funds;
(ii) that the Filer is the investment fund manager and portfolio manager of both the Top Fund and the Underlying Fund;
(iii) the approximate or maximum percentage of the NAV of the Private Top Fund that it is intended to be invested in securities of each Underlying Fund;
(iv) for officers, directors and/or substantial securityholders of the Filer, or of a Top Fund, that, together or alone, have a significant interest in an applicable Underlying Fund, the approximate amount of the significant interest they hold, on an aggregate basis, expressed as a percentage of the applicable Underlying Fund's NAV, and the potential conflicts of interest which may arise from such relationship;
(v) the fees, expenses and any performance or special incentive distributions payable by the Underlying Fund in which a Top Fund invests;
(vi) that investors are entitled to receive from the Filer, on request and free of charge, a copy of the prospectus, offering memorandum or other similar disclosure document of the Underlying Fund, if available; and
(vii) that investors are entitled to receive from the Filer, on request and free of charge, the annual audited financial statements and interim financial reports relating to the Underlying Fund in which the Top Fund invests;
(j) the Filer shall annually inform investors in a Top Fund of their right to receive from the Filer, on request and free of charge, a copy of the prospectus, offering memorandum or other similar disclosure document of each Underlying Fund, if available, and the annual audited financial statements and interim financial reports relating to each Underlying Fund in which the Top Fund invests;
(k) the IRC of a Public Top Fund will review and provide its approval, including by way of standing instructions, prior to the purchase of securities of an Underlying Fund, directly or indirectly, by the Public Top Fund, in accordance with subsection 5.2(2) of NI 81-107;
(l) the Filer complies with section 5.1 of NI 81-107, and the Filer and the IRC of the Public Top Fund comply with section 5.4 of NI 81-107, for any standing instructions the IRC provides in connection with the transactions;
(m) if the IRC becomes aware of an instance where the Filer or an affiliate of the Filer, in its capacity as the manager of a Public Top Fund, did not comply with the terms of this decision, or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Public Top Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the Jurisdiction under which the Public Top Fund is organized;
(n) where applicable and when an investment is made by a Public Top Fund in an Underlying Fund, the annual and interim management reports of fund performance for the Public Top Fund disclose the name of the related person in which an investment is made, being the Underlying Fund;
(o) where applicable and when an investment is made by a Top Fund in an Underlying Fund, the records of portfolio transactions maintained by the Top Fund include, separately for every portfolio transaction effected for a Top Fund by the Filer or through any affiliate of the Filer, the name of the related person in which an investment is made, being the Underlying Fund;
(p) each Top Fund will be treated as an arm's length investor in an Underlying Fund, on the same terms as all other third-party investors, with each investment by a Top Fund in the Underlying Fund made at a price and other terms as favourable for the Top Fund as for all other third-party investors; and
(q) a Top Fund will not invest in an Underlying Fund unless the NAV of the Underlying Fund is independently calculated by an arm's length third party and the annual financial statements of the Underlying Fund are audited and made available to the Top Fund.
Application File #: 2026/0010
SEDAR+ File #: 6382640
Fidelity Investments Canada ULC
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief from the control restriction in subsection 2.2(1) of National Instrument 81-102 to permit investment funds that are reporting issuers to invest in a related blocker that will invest in a non-related partnership -- Relief subject to conditions, including that investment by a Top Fund in securities of an underlying investment fund or scheme be included as part of the calculation for the purposes of the 10% illiquid asset restriction in section 2.4 of NI 81-102 and that neither the Top Fund nor the Underlying Investment will actively participate in the business or operations of the Partnership.
National Instrument 81-102 Investment Funds, ss. 2.2(1) and 19.1.
February 27, 2026
The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of each of the Filer, the Filer's affiliates, the investment funds managed by the Filer or by an affiliate or successor of the Filer that are reporting issuers subject to National Instrument 81-102 -- Investment Funds (NI 81-102) and National Instrument 81-107 -- Independent Review Committee for Investment Funds (NI 81-107) (the Existing Top Funds) and any future investment funds managed by the Filer or an affiliate or successor of the Filer that are, or will be, reporting issuers subject to NI 81-102 and NI 81-107 (the Future Top Funds, and together with the Existing Top Funds, theTop Funds) for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Top Funds from subsection 2.2(1) (the Control Restriction) of NI 81-102 in order to permit each of the Top Funds to purchase the securities of Fidelity Canadian Private Real Estate Trust (the Underlying Investment) if immediately after the purchase, the Top Fund would hold securities representing more than 10% of (a) the votes attaching to the outstanding voting securities of the Underlying Investment or (b) the outstanding equity securities of the Underlying Investment (the Requested Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for the application;
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by Fidelity in all the provinces and territories of Canada (the Jurisdictions), as applicable.
Terms defined in the Legislation, MI 11-102, NI 81-102, NI 81-107 or National Instrument 14-101 Definitions have the same meanings in this decision, unless otherwise defined in this decision.
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation amalgamated under the laws of Alberta and has its head office in Toronto, Ontario.
2. The Filer is currently registered as an investment fund manager in Ontario, Québec and Newfoundland and Labrador. The Filer is also registered as a portfolio manager, mutual fund dealer and exempt market dealer in each of the Jurisdictions and is registered under the Commodity Futures Act (Ontario) in the category of commodity trading manager.
3. The Filer is the investment fund manager of the Existing Top Funds and the manager of the Underlying Investment and the Filer, or an affiliate or successor of the Filer, will be the investment fund manager of the Future Top Funds. To the extent that the Filer or an affiliate or associate of the Filer is the investment fund manager of any Future Top Fund, the representations set out in this decision will apply to the same extent to such Future Top Fund.
4. The Filer is not in default of securities legislation in any of the Jurisdictions.
The Top Funds
5. Each Top Fund is, or will be, an open-ended mutual fund or a class of a mutual fund corporation, including an exchange-traded fund or an alternative mutual fund, organized and governed by the laws of a Jurisdiction or the laws of Canada.
6. The securities of each Top Fund are, or will be, distributed to investors pursuant to a prospectus prepared in accordance with National Instrument 41-101 General Prospectus Requirements (NI 41-101) or National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101), as applicable.
7. The securities of each Top Fund are, or will be, qualified for distribution in one or more Jurisdictions.
8. Each Top Fund is, or will be, a reporting issuer under the securities legislation of one or more Jurisdictions.
9. Each Top Fund may wish to invest in the securities of the Underlying Investment, provided the investment is consistent with the Top Fund's investment objectives and investment strategies.
10. Other than as described herein, each Top Fund will comply with the investment restrictions and practices provided in Part 2 of NI 81-102 in making any investment in the Underlying Investment and, in particular, will comply with the concentration restriction in section 2.1 and the illiquid assets restriction in section 2.4. Each Top Fund will treat the securities of the Underlying Investment as illiquid assets for these purposes.
11. Each Top Fund qualifies or will qualify to invest in the securities of the Underlying Investment pursuant to applicable exemptions from the prospectus requirement under National Instrument 45-106 Prospectus Exemptions (NI 45-106) and/or the Legislation.
12. The Existing Top Funds are not in default of securities legislation of any Jurisdiction, except for the inadvertent breach of the Control Restriction by Fidelity Balanced Private Pool and Fidelity Balanced Income Private Pool.
13. Each Top Fund is or will be subject to NI 81-107 and the manager of each Top Fund has established an independent review committee in order to review conflict of interest matters pertaining to its management of the Top Funds as required by NI 81-107.
The Underlying Investment
14. The Underlying Investment is an open-end trust formed under the laws of the Province of Ontario and is not an investment fund under the securities legislation of the Jurisdictions.
15. The Underlying Investment is a "blocker" as it is a legal entity formed for tax purposes and is not considered to be an investment fund.
16. The Underlying Investment invests substantially all of its assets in limited partnership units of Brookfield Canadian Private Real Estate Partnership L.P (the Partnership). The Underlying Investment may also hold cash.
17. The Partnership is managed by Brookfield Asset Management Ltd. and its affiliates (collectively, Brookfield). The primary purpose of the activities conducted by the Partnership is to seek investment in high-quality real estate assets with a focus on premier office, housing, logistics, retail and alternative real estate assets in major gateway markets and secondary markets in Canada (Real Estate Investments).
18. The net asset value (NAV) per security of the Underlying Investment is based on the value of all assets of the Underlying Investment less its liabilities. All investments owned by the Partnership will be appraised on an annual basis by independent appraisers engaged on behalf of the Partnership. In addition, Brookfield, in its capacity as the general partner will review the valuations of each investment on a monthly basis in consultation with a third-party consultant. Based on the appraisals of investments and valuations (whether internal or external) of Partnership liabilities and other assets, the general partner will determine the NAV of the Partnership.
19. No Top Fund will actively participate in the business or operations of the Underlying Investment.
Investment by Top Funds in the Underlying Investment
20. An investment by a Top Fund in the Underlying Investment will only be made if the investment is, or will be, compatible with the investment objectives and strategies of the Top Fund.
21. The Filer believes that an investment by a Top Fund in the Underlying Investment provides, or will provide, the Top Fund with an efficient and cost-effective way for the Top Fund to obtain exposure to Real Estate Investments, which are generally not available through investment funds that are reporting issuers or through direct investment. A Top Fund will also gain access to the investment expertise of the manager of the Partnership, as well as to their investment strategies and asset types.
22. The Filer believes that a meaningful allocation to private Real Estate Investments provides Top Fund investors with unique diversification opportunities and represents an appropriate investment tool for the Top Funds that has not been widely available in the past. Real Estate Investments have historically provided diversification benefits in adverse market conditions, so the Filer believes that permitting a Top Fund to increase its allocation to such strategies offers the potential to improve a Top Fund's risk adjusted returns.
23. Investments by a Top Fund in the Underlying Investment will be effected at an objective price. The Filer's policies and procedures provide that an objective price, for this purpose, will be the NAV per security of the Underlying Investment.
24. Each Top Fund is, or will be, valued and redeemable daily and the Underlying Investment is subject to redemption limitations, including early redemption penalties and other restrictions on redemptions in a given period of time (collectively, a Redemption Limitation).
25. An investment by a Top Fund in the Underlying Investment will only be made if such investment is consistent with the Top Fund's investment objectives and investment strategies and is in the best interests of that Top Fund.
Control Restriction -- Investments in the Underlying Investment
26. The Top Funds have not, or will not, invest in the Underlying Investment for the purpose of exercising control over, or management of, the Underlying Investment. The securities of the Underlying Investment held by a Top Fund do not provide a Top Fund with any (a) voting rights; (b) right to appoint directors or observers to the board of the Filer; (c) right to restrict the management of the Underlying Investment or be involved in the decision-making with respect to the investments made by the Underlying Investment; or (d) right to restrict the transfer of securities of the Underlying Investment by other investors in the Underlying Investment.
27. The Top Funds will not have any look through rights with respect to the individual portfolio investments held by the Partnership. Further, the Top Funds will not have any rights to, or responsibility for, administering any of the portfolio investments held by the Partnership.
28. Investments by a Top Fund in the Underlying Investment do not, or will not, qualify for the exemption from the Control Restriction in paragraph 2.2(1.1)(a) of NI 81-102 as the Underlying Investment is not an "investment fund" subject to NI 81-102.
Generally
29. The Filer does not anticipate that any fees or sales charges would be incurred, directly or indirectly, by a Top Fund with respect to an investment in the Underlying Investment that, to a reasonable person, would duplicate a fee payable by the Top Fund or its investors to the Filer.
30. In respect of an investment by a Top Fund in the Underlying Investment, no management fees or incentive fees will be payable by a Top Fund that, to a reasonable person, would duplicate a fee payable by the Underlying Investment for the same service.
31. Where applicable, a Top Fund's investment in the Underlying Investment will be disclosed to investors in that Top Fund's quarterly portfolio holding reports, financial statements, and fund facts or ETF facts documents.
32. Where an investment is made by a Top Fund in the Underlying Investment, the annual and interim management reports of fund performance for the Top Funds will disclose the name of the Underlying Investment.
33. Where an investment is made by a Top Fund in the Underlying Investment, the record of portfolio transactions maintained by the Top Fund will include, separately for every portfolio transaction effected for the Top Fund by the Filer or through any affiliate of the Filer, the name of the Underlying Investment.
34. There will be no established, publicly available secondary market for securities of the Underlying Investment nor will there generally be any special redemption rights applicable to the Top Funds as related investors in the Underlying Investment. As such, the Top Funds may not be able to readily dispose of their interests in the Underlying Investment and any interest that a Top Fund holds in the Underlying Investment will be considered an "illiquid asset" under NI 81-102.
35. The prospectus of each Top Fund relying on this decision will disclose in the next renewal or amendment thereto following the date of a decision evidencing the Requested Relief, the fact that the Top Fund may be relying on this decision to invest in the Underlying Investment.
36. The Underlying Investment prepares audited financial statements on an annual basis, in accordance with International Financial Reporting Standards with a qualified auditing firm as the auditor of those financial statements.
37. Absent the Requested Relief the Top Funds would be prohibited by subsection 2.2(1)(a) of NI 81-102 from investing in the Underlying Investment beyond the confines of the Control Restriction. Due to the size disparity, and expected size disparity, between the Top Funds and the Underlying Investment, with the Top Funds significantly larger or expected to be significantly larger than the Underlying Investment, it is likely that a relatively small investment by a larger Top Fund, in terms of percentage of NAV, results or could result in the Top Fund holding securities that represent more than 10% of the outstanding equity securities of the Underlying Investment, contrary to the Control Restriction.
38. Investment in the Underlying Investment is considered an illiquid investment under NI 81-102 and therefore is not permitted to exceed 10% of the NAV of a Top Fund. Investment in the Underlying Investment is included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102 for a Top Fund. NI 81-102 allows holdings in illiquid investments so long as the aggregate exposure to illiquid investments is within the thresholds of the rule. The Filer has its own liquidity policy and manages each Top Fund's liquidity prudently under the policy. Given the readily available liquidity of the remainder of each Top Fund's investment portfolio, the Filer believes that the risk of the Top Funds needing to liquidate its investments in the Underlying Investment when markets are under stress or in other environments where liquidity may be reduced is remote.
39. An investment by a Top Fund in the Underlying Investment will only be made if the investment is, or will be, compatible with the investment objectives and strategies of the Top Fund and is in the best interests of the investors in the Top Fund.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that:
(i) an investment by a Top Fund in the Underlying Investment will be compatible with the investment objective and strategies of such Top Fund and included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102;
(ii) the Underlying Investment invests substantially all of its assets in limited partnership units of the Partnership.
(iii) all investments owned by the Partnership will be appraised on an annual basis by independent appraisers engaged on behalf of the Partnership. In addition, Brookfield, in its capacity as the general partner will review the valuations of each investment on a monthly basis in consultation with a third-party consultant. Based on the appraisals of investments and valuations (whether internal or external) of Partnership liabilities and other assets, the general partner will determine the NAV of the Partnership.
(iv) at the time of the purchase by a Top Fund of securities of the Underlying Investment, either (A) the Underlying Investment holds no more than 10% of its NAV in securities of investment funds, or (B) the Underlying Investment:
(A) has adopted a fundamental investment objective to track the performance of another investment fund or similar investment product;
(B) purchases or holds securities of investment funds that are "money market funds" (as such term is defined in NI 81-102); or
(C) purchases or holds securities that are "index participation units" (as such term is defined in NI 81- 102) issued by an investment fund;
(v) in respect of an investment by a Top Fund in the Underlying Investment, no sales or redemption fees will be paid as part of the investment unless the Top Fund redeems its securities of the Underlying Investment during a Redemption Limitation, in which case a fee may be payable by the Top Fund;
(vi) in respect of an investment by a Top Fund in the Underlying Investment, no management fees or incentive fees will be payable by the Top Fund that, to a reasonable person, would duplicate a fee payable by the Underlying Investment for the same service;
(vii) where applicable, a Top Fund's investment in the Underlying Investment will be disclosed to investors in such Top Fund's quarterly portfolio holding reports, financial statements, and fund facts or ETF facts documents;
(viii) the prospectus of a Top Fund relying on this decision evidencing the Requested Relief discloses, or will disclose, in the next renewal or amendment thereto following the date of the granting of the Requested Relief, the fact that the Top Fund may invest in the Underlying Investment;
(ix) where an investment is made by a Top Fund in the Underlying Investment, the annual and interim management reports of fund performance for the Top Fund disclose the name of the related person in which an investment is made, being the Underlying Investment;
(x) where an investment is made by a Top Fund in the Underlying Investment, the records of portfolio transactions maintained by the Top Fund include, separately for every portfolio transaction effected for a Top Fund by the Filer or through any affiliate of the Filer, the name of the related person in which an investment is made, being the Underlying Investment;
(xi) a Top Fund will not invest in the Underlying Investment for the purpose of exercising control over, or management of, the Underlying Investment;
(xii) a Top Fund will not invest in the Underlying Investment unless the annual financial statements of both the Underlying Investment and the Partnership are audited and made available to the Top Fund;
(xiii) the securities of the Underlying Investment that are held by a Top Fund will not be voted by the Top Fund; and
(xiv) neither a Top Fund nor the Underlying Investment will actively participate in the business or operations of the Partnership.
Application File #: 2026-47
SEDAR+ File #: 06388073
OSC LaunchPad -- Application for time-limited relief from marketplace requirements -- relief sought to allow the Filer to operate a limited scope experimental research endeavour that seeks to evaluate the use of distributed ledger technology for the issuance, distribution, management and trading of Bonds and atomic settlement of trades in such Bonds -- relief granted subject to certain conditions set out in the decision, including that for purposes of the Project proof of concept, the uncertificated Bonds will trade exclusively on the Platform and the only investors will be RBC and TD -- relief from marketplace requirements is time-limited for pilot testing purposes -- relief granted based on the particular facts and circumstances of the application with the objective of fostering innovative in Canada's capital markets -- decision should not be viewed as precedent for other filers in the jurisdictions of Canada.
Instrument, Rule or Policy cited
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions, s. 3.4.
National Instrument 21-101 Marketplace Operation, s. 15.1.
National Instrument 23-101 Trading Rules, s. 12.1.
National Instrument 23-103 Electronic Trading and Direct Access to Marketplaces, s. 10.
March 2, 2026
The Filer proposes to operate a private, permissioned electronic platform that uses distributed ledger technology to issue, distribute and facilitate the trading of bonds among a small group of institutional market participants (the Platform). The Platform arises from a collaborative experimental research endeavour of the Filer, the TD Securities division of the Toronto Dominion Bank (TD Bank), TD Securities Inc. (together with TD Bank, TD), the Bank of Canada (BoC) and Export Development Canada (EDC).
The Ontario Securities Commission (the OSC) through its Office of Economic Growth and Innovation engages with businesses that have innovative products, services or applications to support responsible capital markets innovation. The OSC's LaunchPad is a support program designed to help businesses navigate regulatory requirements and, where appropriate, work with businesses to develop flexible regulatory approaches to allow them to test their innovative business models.
To foster innovation, the OSC and the Autorité des marchés financiers have considered the Filer's application for the Requested Relief (defined below) to allow the Filer to test the Platform and evaluate the use of distributed ledger technology for the issuance, distribution, management and trading of the Bonds (defined below) and atomic settlement of trades in such Bonds. The overall goal of the Filer seeking the Requested Relief in connection with the testing of the Platform is to facilitate innovation in the Canadian capital markets, while upholding the regulatory mandate of promoting investor protection and fair and efficient capital markets.
This decision (the Decision) is based on the unique facts and circumstances of the Filer and for the limited purpose of allowing the Filer to operate its proof-of-concept Platform as described herein. Accordingly, this Decision should not be viewed as a precedent for other filers.
The securities regulatory authority or regulator in each of Ontario (Principal Regulator) and Québec (together with the Principal Regulator, the Coordinated Review Decision Makers) has received an application from the Filer (the Application) for a decision under the securities legislation of those jurisdictions (the Legislation) exempting the Filer from the whole of National Instrument 21-101 Marketplace Operation (NI 21-101), National Instrument 23-101 Trading Rules, and National Instrument 23-103 Electronic Trading and Direct Access to Marketplaces (the Requested Relief).
Under National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions:
(a) the OSC is the Principal Regulator for this Application; and
(b) the Decision evidences the decision of each Coordinated Review Decision Maker.
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this Decision, unless otherwise defined.
In this Decision, the following terms have the following meanings:
"Bond" means a Canadian dollar (CAD) denominated bond issued by the Issuer (defined below) in uncertificated form as represented by the debt security tokens recorded on the Bond Ledger.
"Dealer" means each of the Filer and TD, in that capacity, as well as any other dealer that may be granted access to the Platform in accordance with the terms of this Decision, and "Dealers" means, together, the Filer and TD, as well as any other dealer that may be granted access to the Platform in accordance with the terms of this Decision.
"Issuer" means the issuer of the Bonds, namely EDC.
"Ledger" means each of the Bond Ledger and the Cash Ledger (each as defined below) or any one of them, as the case may be.
"Node" means an instance of the Project's (defined below) application software that operates a version of a Ledger and functions to: (i) check if transactions on the Ledger are valid; (ii) validate blocks of transactions; and, (iii) broadcast information relating to validated transactions to other Nodes for the purpose of synchronizing their respective versions of the relevant Ledger.
"Transfer Event" means certain conditions set out in the Bond (including if the Issuer has reasonable concerns regarding the viability, performance, integrity, availability or security of the Platform or determines that transferring the Bonds off-Platform is required to protect Investors), which upon the occurrence thereof, the Issuer is permitted to transfer the Bonds off-Platform.
"W-CAD" means a digital representation of wholesale Canadian dollars created and managed by the BoC on the Cash Ledger for the purposes of the Project, held in a Cash Wallet, and exchangeable into money in the Lynx payment system.
This Decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the federal laws of Canada with its principal office in Toronto, Ontario.
2. All of the outstanding common shares of the Filer are held by RBC Dominion Securities Limited, a subsidiary of the Royal Bank of Canada.
3. The Filer does not have any securities listed or quoted on an exchange or marketplace in any jurisdiction inside or outside of Canada.
4. The Filer is registered as an investment dealer in all jurisdictions of Canada and is a member of the Canadian Investment Regulatory Organization (CIRO).
5. The Filer is not in default of securities legislation in any jurisdiction of Canada.
6. The Filer, TD, BoC and EDC have collaborated on an experimental research endeavour that seeks to evaluate the use of distributed ledger technology for the issuance, distribution, management and trading of Bonds and atomic settlement of trades in such Bonds in W-CAD (the Project). The Project will evaluate certain agreed research hypotheses and publicly share key findings in research publications.
7. The Project utilizes two private distributed ledgers: one for the Bonds (the Bond Ledger) and one for the W-CAD (the Cash Ledger) and application software that allows for information to be exchanged between the Bond Ledger and the Cash Ledger to facilitate atomic settlement of transactions (the Inter-Ledger Protocol).
8. The Bond Ledger is distributed across a series of Nodes hosted on a cloud server, each of which operates a version of the Bond Ledger and the Inter-Ledger Protocol (the Bond Ledger Nodes). Each Bond Ledger Node is accessible, on a permissioned basis, through the internet via a user interface (the Bond Ledger UI). The Platform is comprised of the Bond Ledger Nodes and the Bond Ledger UI and is maintained and operated by the Filer (in such capacity, the Platform Operator).
9. The Cash Ledger is distributed across a series of Nodes hosted on cloud servers, each of which operates a version of the Cash Ledger and the Inter-Ledger Protocol (the Cash Ledger Nodes). Each Cash Ledger Node is accessible, on a permissioned basis, through the internet via a user interface (the Cash Ledger UI). The BoC operates the Cash Ledger Nodes and the Cash Ledger UI (in such capacity, the Cash Ledger Operator).
10. The Project involves: (a) the issuance by the Issuer of Bonds on the Platform; (b) the issuance of W-CAD by the BoC on the Cash Ledger; (c) atomically settled trading of Bonds through the Inter-ledger Protocol linking the Bond Ledger and the Cash Ledger to facilitate Platform transactions; and, (d) the management of the Bonds on the Platform throughout their entire life cycle, including redemption and the payment of interest.
11. The Bonds will not be issued or traded to the public. While the Platform is designed to accept third-party investors, for purposes of the Project proof of concept, the only investors will be (i) Royal Bank of Canada Treasury, as a client of RBC Dominion Securities Inc., and (ii) The Toronto-Dominion Bank (collectively, and together with any other investor that may thereafter be granted access to the Platform in accordance with the terms of this Decision, the Investors).
12. The Bonds issued by the Issuer qualify for distribution under section 2.34 of National Instrument 45-106 and section 73(1) of the Securities Act (Ontario) (the Act), as they constitute debt securities issued or guaranteed by the Government of Canada. EDC, the Issuer, is for all purposes an agent of His Majesty in right of Canada and has the full faith and credit obligations of the Government of Canada. For the same reason, the dealer registration requirement does not apply pursuant to the exemption set out in section 8.21(2) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and section 35(1) of the Act.
13. The Filer and TD, as Dealers, are joint lead managers of the Bond offering and will act as market makers to facilitate secondary market trading in Bonds on the Platform, with RBC Treasury and TD Bank, as Investors.
14. The Platform Operator authorizes participating Dealers and Investors (collectively, Participants) to access a designated Bond Ledger Node on the Platform through the Bond Ledger UI. Each Participant is assigned a unique, cryptographically secured digital storage and access mechanism on the Bond Ledger (a Bond Wallet). The Issuer is also authorized to access the Platform through the Bond Ledger UI and is assigned a Bond Wallet, but has limited rights commensurate with its role as Issuer of the Bonds.
15. The Cash Ledger Operator authorizes Participants to access a designated Cash Ledger Node through the Cash Ledger UI. Each Participant is assigned a unique, cryptographically secured digital storage and access mechanism on the Cash Ledger (a Cash Wallet). The Issuer is also authorized to access the Cash Ledger through the Cash Ledger UI and is assigned a Cash Wallet.
16. The Platform is only accessible to the Dealers, Investors and the Issuer through the Bond Ledger UI using login credentials. The Filer, as Dealer, has the authority to direct that appropriate access be granted to its Investor. TD, as Dealer, has the authority to direct that appropriate access be granted to its Investor.
17. The Dealers will complete the initial purchase of Bonds from the Issuer on the Platform and subsequently resell the Bonds to the Investors.
18. W-CAD is the digital representation of Canadian dollar currency used to effect transactions on the Platform. Participants and the Issuer will fund their respective Cash Wallets by transferring fiat currency in Canadian dollars to the BoC, which will then be reflected as W-CAD in the equivalent amount in the relevant Cash Wallet. W-CAD transactions will be validated, recorded and broadcasted to the Cash Ledger.
19. The Inter-ledger Protocol is application software that runs on each Node. The Inter-ledger Protocol synchronizes, on a transaction-by-transaction basis, movements of Bonds and W-CAD between the Bond Ledger and the Cash Ledger. The Inter-ledger Protocol validates buy orders by confirming that there is sufficient W-CAD to fund the purchase price of the Bonds in the buyer's Cash Wallet, and validates sell orders by confirming that there are sufficient Bonds in the seller's Bond Wallet to atomically settle the trade. Upon such validation, the orders match, the assets are settled and broadcasted to all Nodes.
20. All secondary market trading in Bonds must take place on the Platform. The Dealers will act as market makers and respond as principals to any request for quote (RFQ) message received through the Platform from Investors seeking to buy or sell Bonds. The quotes, if accepted, will become binding on the Dealer responding to the RFQ. To execute and settle the ensuing trade, the Platform will engage its atomic settlement features through the Inter-ledger Protocol to make the necessary transfers on the Ledgers.
21. Dealers and Investors can enter orders to buy or sell Bonds by logging into the Bond Ledger UI, and can fund their Cash Wallets by logging into the Cash Ledger UI. Both user interfaces are protected by multi-factor authentication. Dealers and Investors and their authorized users are required to keep their login credentials secure and perform Platform activities in accordance with their respective organizations' cybersecurity policies and procedures that apply generally to their operations, and in particular, to fixed-income trading operations.
22. Interest payments, principal repayments and redemptions of Bonds will be funded on notice by the Issuer to a Participant. Payment will then be funded by the Issuer distributing W-CAD to the Cash Wallets of the relevant holders of Bonds, which can then be subsequently converted by such holders to fiat currency in Canadian dollars. Upon redemption or retirement of Bonds, the redemption payment to the Cash Wallet will be accompanied by the transfer to the Issuer of the Bonds on the Platform, following which the Bonds will be removed from the Bond Ledger and cancelled.
23. The Platform is a facility that brings together orders for bonds of multiple buyers and sellers and uses established, non-discretionary methods under which orders interact with each other and buyers and sellers agree to the terms of a trade. As a result, the Platform is a "marketplace" as defined in the Act and NI 21-101.
24. The Filer, TD and BoC selected a third-party development vendor to develop the application software for the Project. The Platform Operator has engaged the third-party vendor to provide cloud and software administration services for all Bond Ledger Nodes (the Platform Administrator). The Platform Administrator also provides cloud and software administration services for the Cash Ledger Nodes designated to each of the Filer, TD and the Issuer. The BoC administers its own Cash Ledger Node.
25. The Platform Administrator provides the cloud environment that hosts all Bond Ledger Nodes and all Cash Ledger Nodes, other than the BoC's Cash Ledger Node.
26. Transfers of Bonds between Bond Wallets on the Bond Ledger and atomic settlement of Bonds and W-CAD pursuant to the Inter-ledger Protocol are controlled by cryptographic keys (Keys).
27. If a Dealer or Investor wishes to execute a transaction on the Platform, the Dealer's or Investor's authorized user will transmit its instructions through the Bond Ledger UI, which automatically maps the transaction instructions received to the Key(s) to that Dealer's or Investor's Bond Wallet. The Platform Operator does not intermediate, and is not actively involved in, this process.
28. The Platform Operator has delegated to the Platform Administrator responsibility for safeguarding and administering the Keys to all Bond Wallets, assisting authorized users with password resets and transmitting instructions through the Bond Ledger UI.
29. The Platform's key management system includes the capability to generate new Keys. The loss of a Key to a Bond Wallet will not result in the loss of the Bonds held in that Bond Wallet. Similarly, the loss of a Key to a Cash Wallet will not result in the loss of the W-CAD held in that Cash Wallet. Because the Bonds cannot be transferred off-Platform (subject to a Transfer Event) and the W-CAD cannot be transferred off the Cash Ledger, administrative control over the Keys by the Platform Administrator does not give rise to the custodial risks associated with private keys to public, permissionless blockchain ledgers.
30. While the Platform Operator is ultimately responsible for supervising the Platform Administrator in its role as custodian of Keys, the execution of transactions on the Platform is conducted by authorized users on behalf of each Dealer or Investor directly through the Bond Ledger UI, without the intervention of the Platform Operator or Platform Administrator.
31. The Platform prevents off-chain movement of Bonds and performs safekeeping, transaction management control and asset administration.
32. The Dealers will hold Bonds on their own behalf in unique Bond Wallets in the names of the Dealers. Additionally, Dealers will hold Bonds on behalf of Investors in unique Bond Wallets in the name of each Investor. All Bonds will be clearly recorded in each Bond Wallet on the Bond Ledger as being separate and apart from the assets of the Platform Operator and each Dealer. The definitive register of Bonds will be kept by the Platform Operator on its designated Bond Ledger Node.
33. If error entries occur on the Platform, they will be resolved according to an "Error Correction Protocol" agreed to by the Filer, the Issuer, and the Participants, which sets out various agreed protocols for resolving errors in the Bond Ledger and for handling any disputes arising therefrom.
34. RBC Investor Services Trust, a trust company regulated by the Office of the Superintendent of Financial Institutions and an affiliate of the Filer, will perform off-Platform recordkeeping and post-trade reconciliation services for Bond positions and transactions on the Platform.
Each of the Coordinated Review Decision Makers (including the Principal Regulator) is satisfied that the Decision in respect of the Requested Relief satisfies the test set out in the securities legislation of its jurisdiction for the relevant regulator or securities regulatory authority to make the Decision in respect of the Requested Relief.
The Decision of each Coordinated Review Decision Maker under the securities legislation of its jurisdiction is that the Requested Relief is granted, provided that:
A. The Filer remains registered as an investment dealer in all jurisdictions of Canada and a member of CIRO in good standing.
B. For so long as TD is a Dealer on the Platform, The Toronto-Dominion Bank remains a Schedule 1 bank under the federal laws of Canada in good standing, and TD Securities Inc. remains registered as an investment dealer in all jurisdictions of Canada and a member of CIRO in good standing.
C. The Filer, as Platform Operator, will limit the assets made available for trading by Participants on the Platform to the Bonds issued by the Issuer. The Platform will not facilitate the trading or settlement of any digital assets created on other platforms or that are able to be traded outside of the Platform.
D. The Bonds will trade exclusively on the Platform (subject to the occurrence of any Transfer Event).
E. The Filer, as Platform Operator, will not permit unreasonable discrimination among Participants when responding to RFQs.
F. The Filer will not unreasonably prohibit, condition or limit access by the Participants to the Platform.
G. The Filer will establish written standards for access to the Platform.
H. The Filer will have internal controls over systems that support RFQ entry, RFQ acceptance and trade execution, including controls provided by third parties under outsourcing arrangements.
I. The Filer will provide at least 45 days' advance notice to the Coordinated Review Decision Makers of any material or significant change to the operations of the Platform or the standards for access to the Platform.
J. The Filer will have information technology controls, including controls relating to operations, information security, change management, problem management, network support, cyber resilience and system software support, including controls provided by third parties under outsourcing arrangements.
K. The Filer will notify the Coordinated Review Decision Makers of any systems failure, malfunction, delay or security breach on the Platform that has a materially negative effect on Investors. Such notification will be provided within a reasonable time following the occurrence thereof, having regard to the nature and the impact of any such event.
L. The Filer will keep books, records and other documents reasonably necessary for the proper recording of its business, including:
(a) a record of all Participants granted or denied access to the Platform;
(b) daily trading summaries of Bonds traded and transaction volumes and values;
(c) records of all RFQs, quotes and trades, including the price, volume, times when the RFQs are entered, answered and accepted; and
(d) a copy of all information posted by the Filer or the Issuer on the Platform.
M. In addition to any other reporting required by securities legislation, the Filer will provide, on a timely basis, any report, document or information to the Coordinated Review Decision Maker that may be requested by such Coordinated Review Decision Maker from time to time for the purpose of monitoring compliance with the Legislation and the conditions in the Decision, in a format acceptable to such Coordinated Review Decision Maker.
N. Before granting access to the Platform to any Dealer other than the Filer and TD, or to any Investor other than RBC Treasury and TD Bank, the Filer shall obtain prior written approval from the Coordinated Review Decision Makers.
O. This Decision may be amended by the Principal Regulator from time to time upon prior written notice to the Filer.
P. This Decision shall expire on December 31, 2027.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, ss. 3.11(1) and 5.1 -- issuer requires relief from the requirement for acquisition statements to be prepared in accordance with IFRS, and specifically to contain comparative interim financial information in its interim financial report filed in a prospectus supplement to a short form base shelf prospectus in connection with a proposed acquisition -- the interim financial statements are acquisition statements for purposes of NI 52-107 -- the interim financial statements comply with subsection 3.2(2) of NI 52-107, other than being acquisition statements -- relief granted subject to conditions substantially similar to subsection 3.2(2) of NI 52-107 and compliance with section 8.9 of NI 51-102.
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, s. 3.11(1).
March 4, 2026
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under section 5.1 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107) exempting the Filer from the requirements of subsection 3.11(1) of NI 52-107 in connection with the filing by the Filer of acquisition statements in a prospectus supplement to a short form base shelf prospectus (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Yukon, Northwest Territories, and Nunavut.
Terms defined in National Instrument 14-101 Definitions, MI 11-102, and NI 52-107 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a reporting issuer in each of the provinces and territories of Canada and is not in default of securities legislation in any jurisdiction of Canada.
2. The common shares of the Filer are listed on the TSX Venture Exchange under the symbol PNG and the OTCQB Venture Market under the symbol KRKNF. No securities of the Filer are listed on any other marketplace. Accordingly, the Filer is and will be at the time of filing the Supplement (as defined herein), a venture issuer as such term is defined in National Instrument 41-101 General Prospectus Requirements.
3. The Filer's financial year end is December 31.
4. The Filer's head office is located at 189 Glencoe Drive, Mount Pearl, NL, A1N 4P6.
5. The Filer filed a short form base shelf prospectus dated August 7, 2025 (the Base Shelf Prospectus) with the Ontario Securities Commission as principal regulator, and under MI 11-102 with the regulator in each of the provinces and territories of Canada.
6. The Ontario Securities Commission issued a receipt in respect of the Base Shelf Prospectus on August 7, 2025.
7. The Filer has entered into a share purchase agreement dated March 3, 2026 with Kraken Robotic Systems Inc. (the Buyer), and Sonardyne Holdings Limited (the Seller), providing for the acquisition by the Buyer from the Seller of all the issued and outstanding shares of Covelya Group Limited (Covelya Group) for an aggregate purchase price of $615 million, subject to certain adjustments (the Acquisition), and reasonably believes that the likelihood of the Filer completing the Acquisition is high.
8. Covelya Group is a private company organized under the laws of the United Kingdom and Wales.
9. Covelya Group's financial year end is December 31.
10. To finance a portion of the purchase price for the Acquisition, the Filer anticipates undertaking an underwritten public offering of subscription receipts convertible into common shares (the Public Offering) pursuant to a prospectus supplement (the Supplement) to be filed in each of the provinces of Canada under its Base Shelf Prospectus.
11. The Acquisition will constitute a significant acquisition for the Filer under section 8.3 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102). As a result, the Filer will be required to include financial statements of Covelya Group in the Supplement in accordance with subsection 10.2(3) of Form 44-101F1 Short Form Prospectus (Form 44-101F1).
12. Subsection 10.2(3) of Form 44-101F1 requires an issuer to include financial statements or other information about a proposed acquisition if the inclusion of the financial statements is necessary for the short form prospectus to contain full, true and plain disclosure of all material facts relating to the securities being distributed.
13. Subsection 10.2(4) of Form 44-101F1 provides that the disclosure required by subsection 10.2(3) of Form 44-101F1 must be satisfied by including (a) the financial statements or other information that are required to be included in, or incorporated by reference into, a business acquisition report filed under Part 8 of NI 51-102, or (b) satisfactory alternative financial statements or other information.
14. Pursuant to paragraph 10.2(4)(a) of Form 44-101F1 and section 8.4 of NI 51-102, for purposes of the Supplement, the financial statements or other information that would be required to be included in, or incorporated by reference into a BAR would include the comparative annual financial statements of Covelya Group for the most recently completed financial year ended on or before the date of the Supplement, audited for the most recently completed financial year.
15. Pursuant to subsection 4.9(2) of Companion Policy 44-101CP Short Form Prospectus Distributions, satisfactory alternative financial statements or other information may be provided to satisfy the requirements of subsection 10.2(3) of Form 44-101F1 when the financial statements or other information that would be required by Part 8 of NI 51-102 relate to a financial year ended within 90 days before the date of the prospectus.
16. The Filer expects to file the Supplement before March 31, 2026, at which time the most recently completed financial year of Covelya Group will have ended on December 31, 2025, which is within 90 days before the date of the Supplement. Accordingly, the Filer intends to include satisfactory alternative financial statements of Covelya Group as permitted by paragraph 10.2(4)(b) of Form 44-101F1 to satisfy the requirements of subsection 10.2(3) of Form 44-101F1.
17. Satisfactory alternative financial statements or other information required to be included in the Supplement under paragraph 10.2(4)(b) of Form 44-101F1 may include:
(a) comparative consolidated annual financial statements of Covelya Group for the financial year ended December 31, 2024, together with the comparative financial year ended December 31, 2023 (the Annual Financial Statements), audited for the most recently completed financial period in accordance with NI 52-107, and reviewed for the comparative period in accordance with section 4.3 of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101); and
(b) unaudited consolidated interim financial statements of Covelya Group (the Interim Financial Statements) for the interim period ended September 30, 2025, together with the comparative interim period ended September 30, 2024, reviewed in accordance with section 4.3 of NI 44-101.
18. The Annual Financial Statements and Interim Financial Statements are acquisition statements because they are financial statements for a business to be acquired that are required to be included in a prospectus under NI 44-101.
19. Paragraph 3.11(1)(b) of NI 52-107 permits a reporting issuer to file acquisition statements prepared in accordance with IFRS.
20. The Filer intends to include in the Supplement the Annual Financial Statements, prepared in accordance with IFRS.
21. The Filer intends to include in the Supplement the Interim Financial Statements, prepared in accordance with IFRS, except for the omission of comparative information for the interim period ended September 30, 2024, as further described below.
22. Section 8.9 of NI 51-102 (the Prior Period Exemption) provides that a reporting issuer is not required to provide comparative information for an interim financial report required under subsection 8.4(3) of NI 51-102 for an acquired business if:
(a) to a reasonable person it is impracticable to present prior-period information on a basis consistent with the most recently completed interim period of the acquired business;
(b) the prior-period information that is available is presented; and
(c) the notes to the interim financial report disclose the fact that the prior-period information has not been prepared on a basis consistent with the most recent interim financial information.
23. Covelya Group has represented to the Filer that it has determined that it is impracticable to prepare and present financial information for the interim period of Covelya Group ended September 30, 2024 (the Covelya Group Comparative Interim Information), on a basis consistent with the most recently completed interim period, because:
(a) Covelya Group has not historically been subject to any applicable law that would require it to prepare financial statements for any interim period, and it has not prepared any such interim financial statements; and
(b) Covelya Group lacks financial data to support the preparation and review of financial statements for the interim period ended September 30, 2024.
24. Based on Covelya Group's representations, the Filer intends to rely on the Prior Period Exemption to omit from the Interim Financial Statements included in the Supplement the Covelya Group Comparative Interim Information, without substituting any prior-period information in its place.
25. The Interim Financial Statements will be prepared in accordance with IFRS in all other respects, and the notes to the Interim Financial Statements will disclose the fact that the prior-period information has not been prepared on a basis consistent with the most recent interim financial information.
26. As a result of the Filer's reliance on the Prior Period Exemption, the Interim Financial Statements will not be prepared in accordance with IFRS within the meaning of NI 52-107 because they will lack comparative period information that is required by IAS 34 Interim Financial Reporting (IAS 34).
27. While the Prior Period Exemption exempts a reporting issuer from the requirement to provide financial information for a comparative interim period in a financial report of an acquired business where it would be impracticable to do so, NI 52-107 does not provide a corresponding non-discretionary exemption from the requirement that acquisition statements for an interim period be prepared in accordance with IFRS.
28. Where a reporting issuer is required to file an interim financial report that is not required under securities legislation to provide comparative interim financial information, other than acquisition statements, subsection 3.2(2) of NI 52-107 permits the issuer to file financial statements that do not comply with IAS 34, provided that:
(a) the statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows and explanatory notes are prepared in accordance with IAS 34 other than the requirement in IAS 34 to include comparative financial information; and
(b) the interim financial report discloses that it does not comply with IAS 34 because it does not include comparative interim financial information, and that the statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows and explanatory notes have been prepared in accordance with IAS 34 other than the requirement in IAS 34 to include comparative financial information.
29. The Interim Financial Statements would comply with subsection 3.2(2) of NI 52-107, but for the fact that they are acquisition statements.
The principal regulator is satisfied that the order meets the test set out in the securities legislation of the Jurisdiction (the Legislation) of the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted, provided that:
(a) the Interim Financial Statements are prepared in accordance with IAS 34, other than the requirement in IAS 34 to include comparative financial information;
(b) the basis of preparation note to the Interim Financial Statements discloses that the Interim Financial Statements, comprising the statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows, and explanatory notes, are prepared in accordance with IAS 34 other than the requirement in IAS 34 to include comparative financial information;
(c) the Filer complies with the conditions of the Prior Period Exemption set out in section 8.9 of NI 51-102; and
(d) the Supplement discloses the fact that this decision has been granted.
OSC File #: 2026-96
Lightwater Partners Ltd. and All-Canadian Oil & Gas ETF
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from requirement in section 59 of the Securities Act (Ontario) to include an underwriter's certificate in a prospectus of an exchange-traded securities of mutual fund -- relief from take-over bid requirements of NI 62-104 in respect of normal-course purchases of securities of an exchange-traded securities of mutual fund.
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 59(1) and 147.
National Instrument 62-104 Take-Over Bids and Issuer Bids, Part 2 and s. 6.1.
March 5, 2026
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Fund for a decision under the securities legislation of the Jurisdiction (the Legislation) that grants an exemption to:
(a) the Filer and the Fund from the requirement in subsection 5.9(1) of National Instrument 41-101 General Prospectus Requirements (NI 41-101) and subsection 59(1) of the Securities Act (Ontario) to include a certificate of an underwriter in the Fund's prospectus in respect of the Units (the Underwriter's Certificate Relief); and
(b) a person or company purchasing Units in the normal course through the facilities of the TSX (as defined below) or another Marketplace (as defined below) from the Take-Over Bid Requirements (as defined below) in Part 2 of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104) (the Take-Over Bid Relief),
(collectively, the Underwriter's Certificate Relief and the Take-Over Bid Relief, the Exemption Sought).
Under National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).
Capitalized terms used herein have the meaning ascribed thereto below (or in National Instrument 14-101 Definitions, MI 11-102, and NI 81-102, as applicable) unless otherwise defined in this Decision.
Basket of Securities means a group of securities and/or assets determined by the Filer from time to time representing the constituents of the Fund to the extent reasonably possible.
Dealer means a registered dealer (that may or may not be a Designated Broker) that has entered into a Dealer Agreement with the Filer, on behalf of the Fund, pursuant to which the Dealer may subscribe for Units.
Dealer Agreement means an agreement between the Filer, on behalf of the Fund, and a Dealer.
Declaration of Trust means the master declaration of trust establishing the Fund dated February 2, 2026, as the same may be supplemented, amended or amended and restated from time to time.
Designated Broker means a Dealer that has entered into a Designated Broker Agreement with the Filer, on behalf of the Fund, pursuant to which the Designated Broker agrees to perform certain duties in relation to the Fund.
Designated Broker Agreement means an agreement between the Filer, on behalf of the Fund, and the Designated Broker.
ETF Facts means an ETF facts document required pursuant to NI 41-101 in respect of one or more classes or series of ETF securities being distributed under a prospectus.
Marketplace means a "marketplace" as defined in National Instrument 21-101 Marketplace Operation that is located in Canada.
NAV means the net asset value of the Fund as calculated on each Valuation Day in accordance with the Declaration of Trust.
NI 81-102 means National Instrument 81-102 Investment Funds.
Prospectus Delivery Requirement means the requirement that a dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which the prospectus requirement of the Legislation applies, send or deliver to the purchaser or its agent, unless the dealer has previously done so, the latest prospectus and any amendment either before entering into an agreement of purchase and sale resulting from the order or subscription, or not later than midnight on the second business day after entering into that agreement.
Take-Over Bid Requirements means the requirements of NI 62-104 relating to take-over bids, including the requirement to file a report of a take-over bid and to pay the accompanying fee, in each Canadian Jurisdiction.
Unitholder means a holder of Units.
Units means redeemable, transferable Class E Units of the Fund, each of which represent an undivided interest in the net assets of the Fund, and Unit means any one of them.
Trading Day means a day on which a session of the TSX is held.
TSX means Toronto Stock Exchange.
Valuation Day means each day that is a Trading Day, or any other day as may be determined by the Filer from time to time.
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation incorporated under the provincial laws of Ontario with its registered office located in Toronto, Ontario.
2. The Filer is a registered portfolio manager in Ontario and an investment fund manager in Newfoundland and Labrador, Ontario and Québec.
3. The Filer is, or will be, the promoter, trustee, manager and portfolio manager of the Fund.
4. The Filer is not in default of securities legislation in any of the Jurisdictions.
The Fund
5. The Fund is, or will be, a mutual fund structured as a trust that is governed by the laws of Ontario. The Fund is, or will be, a reporting issuer in each of the Jurisdictions. The Fund offers, or will offer, the Units.
6. Subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities, the Fund is, or will be, subject to NI 81-102 and Unitholders will have the right to vote at a meeting of Unitholders in respect of matters prescribed by NI 81-102.
7. The Filer has filed an amended and restated preliminary prospectus dated February 20, 2026 in respect of the Units, as well as ETF Facts for the Units, with the securities regulatory authorities in each of the Jurisdictions (except for Québec).
8. The Filer has filed a preliminary prospectus dated February 20, 2026 in respect of the Units, as well as ETF Facts for the Units, with the securities regulatory authority in Québec.
9. The Filer has applied to list the Units on the TSX or another Marketplace. The Filer will not file a final prospectus to qualify the Units until the applicable Marketplace has conditionally approved the listing of the Units.
10. The Filer will file a final long form prospectus prepared and filed in accordance with NI 41-101, subject to any exemptions that may be granted by the applicable securities regulatory authorities.
11. Units will be distributed on a continuous basis in the Jurisdictions under a prospectus in the form prescribed by Form 41-101F2. Generally, all orders to purchase Units directly from the Fund (Creation Units) must be placed by Designated Brokers or Dealers. The Fund reserves the absolute right to reject any subscription order placed by a Designated Broker and/or a Dealer. No fees will be payable by the Fund to a Designated Broker or a Dealer in connection with the issuance of Units. On the issuance of Units, the Filer may, at its discretion, charge an administrative fee to a Designated Broker or a Dealer to offset any expenses incurred in issuing the Units. Dealers or Designated Brokers subscribe for Creation Units for the purpose of facilitating investor purchases of Units on the TSX or another Marketplace.
12. On any Trading Day, a Designated Broker or a Dealer may place a subscription order for a prescribed number of Units (a PNU) or integral multiple PNU.
13. Unless the Filer shall otherwise agree or the Declaration of Trust shall otherwise provide, as payment for a PNU, a Dealer or a Designated Broker must deliver subscription proceeds consisting of a Basket of Securities and cash in an amount sufficient so that the value of the Basket of Securities and cash delivered is equal to the NAV of the applicable PNU determined at the Valuation Time on the effective date of the subscription order.
14. The Filer may, in its complete discretion, instead accept subscription proceeds consisting of (i) cash only in an amount equal to the NAV of the applicable PNU of the Fund determined at the Valuation Time on the effective date of the subscription order, plus (ii) if applicable, associated costs and expenses that the Fund incurs or expects to incur in purchasing securities on the market with such cash proceeds.
15. The Filer will publish, except when circumstances prevent it from doing so, the applicable PNU for the Fund following the close of business on each Trading Day on its website, www.lightwaterpartners.com. The Filer may, at its discretion, increase or decrease the applicable PNU from time to time.
16. The Filer may from time to time and, in any event not more than once quarterly, require a Designated Broker to subscribe for Units of the Fund for cash in a dollar amount not to exceed 0.30% of the NAV of the Fund, or such other amount as may be agreed to by the Filer and the Designated Broker. The number of Units issued will be the subscription amount divided by the NAV per Unit next determined following the delivery by the Filer of a subscription notice to the Designated Broker. Payment for the Units must be made by the Designated Broker by no later than the second Trading Day (or such shorter period, as may be required by applicable law) after the subscription notice has been delivered.
17. In addition to subscribing for and reselling their Creation Units, the Designated Brokers and Dealers will also generally be engaged in purchasing and selling Units of the same class or series as the Creation Units in the secondary market.
18. The Filer may appoint a Designated Broker to perform certain other functions, which may include standing in the market with a bid and ask price for the Units for the purpose of maintaining liquidity for the Units.
19. Except for subscriptions for Creation Units from the Designated Brokers and Dealers, as described above, and other distributions that are exempt from the Prospectus Delivery Requirement under the Legislation, Units generally will not be able to be purchased directly from the Fund. Investors are generally expected to purchase and sell Units, directly or indirectly, through dealers executing trades through the facilities of the TSX or another Marketplace. Units may also be issued directly to Unitholders upon a reinvestment of distributions of income or capital gains.
20. Unitholders that are not Designated Brokers or Dealers that wish to dispose of their Units may generally do so by selling their Units on the TSX or other Marketplace, through a registered dealer, subject only to customary brokerage commissions. On any Trading Day, Unitholders may redeem (i) Units for cash at a redemption price per Unit equal to 95% of the closing price for the Units on the TSX on the effective day of the redemption, subject to a maximum redemption price per Unit equal to the NAV per Unit on the effective day of redemption, less any applicable redemption fee to offset any associated transaction costs, or (ii) a PNU or a multiple PNU for cash equal to the NAV of that number of Units less any applicable redemption fee to offset any associated transaction costs.
Underwriter's Certificate Relief
21. Designated Brokers and Dealers will not provide the same services in connection with a distribution of Creation Units as would typically be provided by an underwriter in a conventional underwriting.
22. The Filer will generally conduct its own marketing, advertising and promotion of the Fund to the extent permitted by its registrations.
23. Designated Brokers and Dealers will not be (and have not been) involved in the preparation of the Fund's prospectus, will not perform any review or any independent due diligence to the content of the Fund's prospectus, and will not incur any marketing costs or receive any underwriting fees or commissions from the Fund or the Filer in connection with the issuance of Units. Designated Brokers and Dealers generally seek to profit from their ability to create and redeem Units by engaging in arbitrage trading to capture spreads between the trading prices of Units and their underlying securities and by making markets for their clients to facilitate client trading in the Units.
24. Neither the Filer nor the Fund will pay any fees or commissions to Designated Brokers or Dealers in connection with distributing Units. As the Designated Brokers and Dealers will not receive any remuneration in connection with distributing Units and as the Dealers will change from time to time, it is not practical to provide an underwriter's certificate in the prospectus of the Fund.
Take-Over Bid Relief
25. As equity securities that will trade on the TSX or another Marketplace, it is possible for a person or company to acquire such number of Units so as to trigger the application of the Take-Over Bid Requirements. However:
a. it will be difficult for one or more Unitholders to exercise control or direction over the Fund, as the constating documents of the Fund will provide that there can be no changes made to the Fund that do not have the support of the Filer;
b. it will be difficult for purchasers of the Units to monitor compliance with the Take-Over Bid Requirements because the number of outstanding Units of the Fund will always be in flux as a result of the ongoing issuance and redemption of Units by the Fund; and
c. the way in which the Units will be priced deters anyone from either seeking to acquire control, or offering to pay a control premium for outstanding Units because pricing for each Unit will generally reflect the net asset value of the Units.
26. The application of the Take-Over Bid Requirements to the Fund would have an adverse impact on the liquidity of the Units, because they could cause the Designated Brokers, the Dealers and other large Unitholders to cease trading Units once the Designated Brokers, Dealers or other large Unitholders reach the prescribed threshold at which the Take-Over Bid Requirements apply. This, in turn, could serve to provide conventional mutual funds with a competitive advantage over the Fund.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted.
Application File #: 2026-48
SEDAR+ File #: 06388119
1. Adam Peter Newsome (Newsome) is registered under the Securities Act, R.S.O. 1990, c. S.5, as amended (the Act) as an advising representative in the category of portfolio manager with Optimize Global Asset Management Inc.
2. On February 27, 2026, Staff of the Registration, Inspections and Examinations Division of the Ontario Securities Commission (the RIE Division) informed Newsome that they were recommending to the Director that his registration under the Act be suspended for three months and until such time as he successfully complete the Ethical Practice in the Financial Service Industry (EPFSI) course offered by CSI.
3. Newsome had entered into a consumer proposal shortly after he obtained his registration as an advising representative in September 2023.
4. Registered individuals are required to update financial information previously submitted in Form 33-109F4 Registration of Individuals and Review of Permitted Individuals (Form F4) within 15 days of a change pursuant to Part 4 of National Instrument 33-109 Registration Information. Newsome failed to update this information on Form F4.
5. In January 2025, Newsome submitted an application for registration as a dealing representative in the category of investment dealer with Optimize Wealth Management Inc. and this application did not disclose his consumer proposal in his Form F4 either.
6. During the RIE Division's review of these non-disclosures, Newsome advised that he believed Item 16 of Form F4 applied only to bankruptcies and not to consumer proposals, stating that his failure to disclose his consumer proposal resulted from an honest mistake.
7. The RIE Division's recommendation is based on Newsome's failure to demonstrate the level of care and diligence expected of a registrant-particularly one with almost 20 years of industry experience, repeated exposure to regulatory requirements, and recent training on ethics. In any event, Newsome was responsible for ensuring that the information submitted on his behalf was accurate and complete. However, the RIE Division acknowledges that Newsome was forthcoming, cooperative, and appeared genuinely remorseful during his voluntary interview. In the RIE Division's view, a three-month suspension is appropriate to support the rehabilitation of Newsome's fitness for registration, provided that Newsome also successfully complete the EPFSI before applying to reinstate his registration.
8. The RIE Division's February 27, 2026 letter informed Newsome of his right to request an opportunity to be heard under s. 31 of the Act if he wished to oppose Staff's recommendation.
9. Newsome has provided written confirmation to the RIE Division that he consents to a suspension of his registration.
10. My decision is that the registration of Newsome be suspended, effective March 3, 2026. Newsome may not apply for reinstatement of his registration for a minimum of three months and only after he has successfully completed the EPFSI course. Should his registration be reinstated, he will be subject to close supervision for the duration of his consumer proposal.
March 4, 2026 |
"Dena Staikos" |
____________________________________ |
____________________________________ |
Date |
Dena Staikos |
Associate Vice President, |
|
Registration, Inspections and Examinations Division |
|
Ontario Securities Commission |
Temporary, Permanent & Rescinding Issuer Cease Trading Orders
Company Name |
Date of Temporary Order |
Date of Hearing |
Date of Permanent Order |
Date of Lapse/Revoke |
|
||||
THERE IS NOTHING TO REPORT THIS WEEK. |
||||
Company Name |
Date of Order |
Date of Revocation |
|
||
Ayurcann Holdings Corp. |
March 6, 2026 |
__________ |
Temporary, Permanent & Rescinding Management Cease Trading Orders
Company Name |
Date of Order |
Date of Lapse |
|
||
THERE IS NOTHING TO REPORT THIS WEEK. |
||
Outstanding Management & Insider Cease Trading Orders
Company Name |
Date of Order or Temporary Order |
Date of Hearing |
Date of Permanent Order |
Date of Lapse/Expire |
Date of Issuer Temporary Order |
|
|||||
Performance Sports Group Ltd. |
19 October 2016 |
31 October 2016 |
31 October 2016 |
__________ |
__________ |
Company Name |
Date of Order |
Date of Lapse |
|
||
Agrios Global Holdings Ltd. |
September 17, 2020 |
__________ |
|
||
Sproutly Canada, Inc. |
June 30, 2022 |
__________ |
|
||
iMining Technologies Inc. |
September 30, 2022 |
__________ |
|
||
Alkaline Fuel Cell Power Corp. |
April 4, 2023 |
__________ |
|
||
mCloud Technologies Corp. |
April 5, 2023 |
__________ |
|
||
FenixOro Gold Corp. |
July 5, 2023 |
__________ |
|
||
HAVN Life Sciences Inc. |
August 30, 2023 |
__________ |
|
||
Perk Labs Inc. |
April 4, 2024 |
__________ |
|
||
FuelPositive Corporation |
January 29, 2026 |
__________ |
|
||
Realbotix Corp. |
January 30, 2026 |
__________ |
Amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure
1. National Instrument 81-101 Mutual Fund Prospectus Disclosure is amended by this Instrument.
2. Form 81-101F1 Contents of Simplified Prospectus is amended
(a) in subsection 1.1(4) of Part A by replacing "until receipts for this document are obtained by the mutual fund" with "until [a receipt/ receipts] for this document [is/are] obtained by the mutual fund",
(b) in subsection 2.2(3) of Part A by deleting "a list of the mutual funds to which the simplified prospectus pertains and",
(c) in Item 12 of Part A by replacing "set by law in the applicable province or territory."" with "set by law in the applicable province or territory.",
(d) in Part A by adding the following Item:
Item 19 -- Part B Introduction
(1) For a multiple SP in which the Part B sections are bound separately from the Part A section and any Part B section is bound separately from any other Part B section, at the option of the mutual fund, disclose under the heading "What Is a Mutual Fund and What Are the Risks of Investing in a Mutual Fund?" all of the following:
(a) a brief general description of the nature of a mutual fund;
(b) the risk factors and other investment considerations that an investor should take into account that are associated with investing in mutual funds generally.
(2) At a minimum, in response to the requirements of subsection (1), include disclosure in substantially the following words:
"Mutual funds own different types of investments, depending upon the fund's investment objectives. The value of these investments will change from day to day, reflecting changes in interest rates, economic conditions and market and company news. As a result, the value of a mutual fund's [units/shares] may go up and down, and the value of your investment in a mutual fund may be more or less when you redeem it than when you purchased it.
[If applicable] The full amount of your investment in any [name of mutual fund family] mutual fund is not guaranteed.
Unlike bank accounts or GICs, mutual fund [units/shares] are not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer."
(3) For a multiple SP in which the Part B sections are bound separately from the Part A section and any Part B section is bound separately from any other Part B section, at the option of the mutual fund, include any information that is applicable to more than one of the mutual funds, including for greater certainty, all of the following:
(a) explanatory information;
(b) risk factors;
(c) investment considerations;
(d) investment restrictions;
(e) descriptions of the securities offered under the simplified prospectus;
(f) details regarding the name, formation and history of the mutual fund.
(4) Any information included in an introductory section under subsection (3) may be omitted elsewhere in the Part B sections of the document.
INSTRUCTIONS:
(1) In providing disclosure under subsection (1), follow the instructions under Item 9 of Part B of this Form, as appropriate.
(2) Subsection (3) may be used to avoid the need for repetition of standard information in each Part B section of a multiple SP.
(3) Examples of explanatory information that may be disclosed under subsection (3) at the option of the mutual fund are
(a) definitions or explanations of terms used in each Part B section, such as "portfolio turnover rate" and "management expense ratio", and
(b) a discussion or explanation of the tables or charts that are required in each Part B section of the document.
(4) Examples of the risks that may be disclosed under subsection (3) at the option of the mutual fund are stock market risk, interest rate risk, foreign security risk, foreign currency risk, specialization risk and risk associated with the use of derivatives. If risk disclosure is provided under that subsection, the fund-specific disclosure about each mutual fund described in the document must contain a reference to the appropriate parts of this risk disclosure.
(5) Item 2 of Part B of this Form is similar to this Item. For a multiple SP in which the Part B sections are bound separately from the Part A section and any Part B section is bound separately from any other Part B section, a mutual fund organization may include this Item either at the end of the Part A section of the multiple SP, or at the beginning of the Part B section, at its option. In all other cases, this Item must be included at the beginning of the Part B section.,
(e) after subsection (4) of the Instructions to Item 2 of Part B by adding the following:
(5) Item 19 of Part A of this Form is similar to this Item. For a multiple SP in which the Part B sections are bound separately from the Part A section and any Part B section is bound separately from any other Part B section, a mutual fund organization may include this Item either at the end of the Part A section of the multiple SP, or at the beginning of the Part B section, at its option. In all other cases, this Item must be included at the beginning of the Part B section., and
(f) in subsection (2) of Item 8 of Part B by replacing "was formed and the date and manner of its formation"with "was formed, the date and manner of its formation and the date on which it started".
3. Form 81-101F2 Contents of Annual Information Formis amended in subsection (2) of Item 24 by replacing
(a) "Fund[s]" wherever it occurs with "fund[s]", and
(b) "Fund['s/s']" with "fund['s/s']".
4. (1) This Instrument comes into force on April 22, 2026.
(2) In Saskatchewan, despite subsection (1), if this Instrument is filed with the Registrar of Regulations after April 22, 2026, this Instrument comes into force on the day on which it is filed with the Registrar of Regulations.
Amendments to National Instrument 81-102 Investment Funds
1. National Instrument 81-102 Investment Funds is amended by this Instrument.
2. Subsection 2.1(5) is amended by replacing "subsection (5) of Item 6 and subsection (5) of Item 9 of Part B" with "subsection (5) of Item 4 of Part B and subsection (7) of Item 9 of Part B".
3. Appendix E is amended by replacing the table with the following:
Jurisdiction
Securities Legislation Reference
Alberta
Paragraphs 191(1)(a), 191(1)(c) and 191(1)(d) of the Securities Act (Alberta)
British Columbia
Paragraphs 9(a), 9(c) and 9(d) of BC Instrument 81-513 Self-Dealing
New Brunswick
Paragraphs 143(1)(a), 143(1)(c) and 143(1)(d) of the Securities Act (New Brunswick)
Newfoundland and Labrador
Paragraphs 118(1)(a), 118(1)(c) and 118(1)(d) of the Securities Act (Newfoundland and Labrador)
Nova Scotia
Paragraphs 125(1)(a), 125(1)(c) and 125(1)(d) of the Securities Act (Nova Scotia)
Ontario
Items 117(1)1, 117(1)3 and 117(1)4 of the Securities Act (Ontario)
Saskatchewan
Paragraphs 126(1)(a), 126(1)(c) and 126(1)(d) of The Securities Act, 1988 (Saskatchewan)
4. (1) This Instrument comes into force on April 22, 2026.
(2) In Saskatchewan, despite subsection (1), if this Instrument is filed with the Registrar of Regulations after April 22, 2026, this Instrument comes into force on the day on which it is filed with the Registrar of Regulations.
Amendments to National Instrument 81-106 Investment Fund Continuous Disclosure
1. National Instrument 81-106 Investment Fund Continuous Disclosure is amended by this Instrument.
2. Section 3.2 is amended
(a) in Item 18 by deleting ", and, if applicable, for each class or series", and
(b) by repealing Item 19.
3. Section 3.3 is amended by deleting ",for each class or series,".
4. Subsection 3.6(1) is amended in Item 2 by repealing paragraph (c).
5. Subsection 3.11(2) is amended by replacing "and "increase or decrease in total equity from operations per security, or in net assets attributable to securityholders from operations, excluding distributions, per security" line items" with "line item".
6. Subsection 9.4(2.2) is amended in paragraph (f) by replacing
(a) "Fund[s]" wherever it occurs with "fund[s]", and
(b) "Fund['s/s']" with "fund['s/s']".
7. Item 2.5 of Part B of Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance is amended in the Instructions by adding the following:
(5) Item 2.5 does not apply to an investment fund that complies with section 2.5 of National Instrument 81-107 Independent Review Committee for Investment Funds.
8. Before January 1, 2027, if an investment fund complies with sections 3.2 and 3.3 and subsection 3.6(1) of National Instrument 81-106Investment Fund Continuous Disclosure as they were in force on April 21, 2026, the investment fund is not required to comply with those provisions of National Instrument 81-106Investment Fund Continuous Disclosure as amended by this Instrument.
9. (1) This Instrument comes into force on April 22, 2026.
(2) In Saskatchewan, despite subsection (1), if this Instrument is filed with the Registrar of Regulations after April 22, 2026, this Instrument comes into force on the day on which it is filed with the Registrar of Regulations.
Amendments to National Instrument 81-107 Independent Review Committee for Investment Funds
1. National Instrument 81-107 Independent Review Committee for Investment Funds is amended by this Instrument.
2. The Instrument is amended by adding the following section:
Manager to prepare report on related party transactions
2.5 A manager must prepare, for each financial year of an investment fund, and no later than the date the investment fund files its annual financial statements, a report that includes, under the heading "Manager's Report on Related Party Transactions", all of the following:
(a) a list containing the following information regarding any report filed by the investment fund with the securities regulatory authority or regulator in the most recent financial year that pertains to a transaction involving the investment fund and an entity related to the manager:
(i) the title of the report;
(ii) a brief description of the type of transactions to which the report pertains;
(iii) the date of the report;
(b) a statement that a report referred to in paragraph (a) is available at www.sedarplus.com;
(c) for a transaction involving the investment fund and an entity related to the manager that is not identified in any report referred to in paragraph (a), a brief description of the type of transaction..
3. Except in British Columbia, subsection 4.4(1) is amended by
(a) deleting "and" in subparagraph (h)(iii),
(b) replacing "." after paragraph (i) with "; and", and
(c) adding the following paragraph:
(j) in an appendix, the report prepared by the manager under section 2.5..
4. In British Columbia, subsection 4.4 (1) is amended
(a) in subparagraph (h)(ii) by adding "and" after "not meeting the condition;",
(b) in subparagraph (h)(iii) by replacing "with the matter; and" with "with the matter;",
(c) by
(i) renumbering subparagraph (h)(iv) as paragraph (i),
(ii) replacing "." at the end of paragraph (i) with ";"
(d) by adding the following paragraph:
(j) in an appendix, the report prepared by the manager under section 2.5..
5. Section 6.2 is amended
(a) in subsection (2) by adding "in a report prepared in accordance with Form 81-107A Conflict Reporting Form for Related Issuer Purchases" after "securities regulatory authority or regulator", and
(b) by adding the following subsections:
(5) The investment fund conflict of interest reporting requirements do not apply to an investment fund that files a report under subsection (2).
(6) For the purpose of subsection (5), "investment fund conflict of interest reporting requirements" has the meaning ascribed to that term in National Instrument 81-102 Investment Funds..
6. Subsection 6.3 is amended
(a) in subsection (3) by adding "in a report prepared in accordance with Form 81-107A Conflict Reporting Form for Related Issuer Purchases" after "securities regulatory authority or regulator", and
(b) by adding the following subsections:
(6) The investment fund conflict of interest reporting requirements do not apply to an investment fund that prepares and files a report referred to in subsection (3).
(7) For the purpose of subsection (6), "investment fund conflict of interest reporting requirements" has the meaning ascribed to that term in National Instrument 81-102 Investment Funds..
7. Section 6.4 is amended
(a) in subsection (2) by adding "in a report prepared in accordance with Form 81-107A Conflict Reporting Form for Related Issuer Purchases" after "securities regulatory authority or regulator", and
(b) by adding the following subsections:
(5) The investment fund conflict of interest reporting requirements do not apply to an investment fund that prepares and files the report referred to in subsection (2).
(6) For the purpose of subsection (5), "investment fund conflict of interest reporting requirements" has the meaning ascribed to that term in National Instrument 81-102 Investment Funds..
8. The following form is added after Appendix B:
FORM 81-107A
CONFLICT REPORTING FORM FOR RELATED ISSUER PURCHASES
GENERAL INSTRUCTIONS
Form
(1) A report prepared in accordance with this Form must include the disclosure required in this Form, as applicable. Instructions for providing this disclosure are in italic type.
(2) Terms used and not defined in this Form that are defined or interpreted in National Instrument 81-101 Mutual Fund Prospectus Disclosure, National Instrument 81-102 Investment Funds, National Instrument 81-105 Mutual Fund Sales Practices, National Instrument 81-106 Investment Fund Continuous Disclosure and this Instrument have the same meanings as in those Instruments.
Responses
(3) A report prepared in accordance with this Form must state the required information concisely and in plain language.
(4) Responses must be as simple and direct as is reasonably possible and include only as much information as is necessary for readers to understand the matters for which disclosure is being provided.
(5) A report prepared in accordance with this Form must contain only the information that is required or permitted under this Form.
(6) All applicable items in this Form must be responded to.
(7) Omit from Items answers that are not applicable or respond to them with the words "not applicable", unless otherwise required under this Form.
(8) Prepare a report in accordance with this Form in respect of one or more investment funds. If the report combines information in respect of more than one investment fund, information under Item 4 must be presented in the form of a single table, ordered alphabetically by name of each applicable investment fund and, for each applicable investment fund, ordered chronologically by date of purchase of an investment by the investment fund.
Presentation
(9) A report prepared in accordance with this Form must be prepared in a font that is legible and on letter-size paper. If a report is made available online, the information in the report must be presented in a way that allows that information to be printed in a readable format.
(10) Each item in a report prepared in accordance with this Form must be presented in the order and under the heading or sub-heading stipulated in this Form.
(11) If the report prepared in accordance with this Form contains design elements, including, for greater certainty, graphics, photos or artwork, the elements must not detract from the information disclosed in the document.
(12) For the purposes of paragraph (i) of Item 4,
(a) in British Columbia, "related person or company" means a related person as defined in BC Instrument 81-513 Self Dealing except that "mutual fund", as it appears in the definition of "related person" in that Instrument, is to be read as "investment fund", and
(b) in New Brunswick, "related person or company" means a related person as defined in section 134.1 of the Securities Act (New Brunswick), except that "mutual fund", as it appears in the definition of "related person" in that section, is to be read as "investment fund".
Item 1 -- Fund Details
(1) Provide the name of each investment fund to which this report pertains.
(2) Provide the name of the manager for each investment fund identified in subsection (1).
Item 2 -- Securities Legislation and Exemptive Relief
Identify the provisions of securities legislation under which this report is being prepared, including, for greater certainty, any exemptions relied on by the investment fund.
Item 3 -- Financial Year Covered
Identify the financial year to which this report pertains.
Item 4 -- Related Issuer Investments
In the form of a table, provide the following information, as applicable, for each type of investment referred to in sections 6.2, 6.3 and 6.4 of this Instrument for the financial year referred to in Item 3:
(a) the name of the investment fund to which this report relates;
(b) the date of the investment;
(c) the name of the issuer of the security in which the investment was made;
(d) the class or series of the security in which the investment was made;
(e) the coupon rate and maturity date of the security in which the investment was made;
(f) the number of securities purchased in the investment;
(g) the price per security purchased in the investment;
(h) the settlement amount of the investment;
(i) the name of any related person or company that has received, or will receive, a fee, commission or other form of compensation in respect of the investment made;
(j) if the investment fund made the investment through a dealer and the dealer is an entity related to the manager, the name of the dealer;
(k) whether the investment was made in the primary market or the secondary market..
9. Before January 1, 2027, if an investment fund complies with Parts 4, 5, 6 and 7 of National Instrument 81-106 Investment Fund Continuous Disclosure as they were in force on April 21, 2026 and Parts 2 and 4 of National Instrument 81-107Independent Review Committee for Investment Funds as they were in force on April 21, 2026, Parts 2 and 4 of National Instrument 81-107Independent Review Committee for Investment Funds as amended by this Instrument do not apply to the investment fund.
10. Before January 1, 2027, if an investment fund complies with Part 6 of National Instrument 81-107Independent Review Committee for Investment Funds as it was in force on April 21, 2026, the investment fund is not required to comply with Part 6 of National Instrument 81-107Independent Review Committee for Investment Funds as amended by this Instrument.
11. (1) This Instrument comes into force on April 22, 2026.
(2) In Saskatchewan, despite subsection (1), if this Instrument is filed with the Registrar of Regulations after April 22, 2026, this Instrument comes into force on the day on which it is filed with the Registrar of Regulations.
Change to Commentary in National Instrument 81-107 Independent Review Committee for Investment Funds
1. The Commentary to National Instrument 81-107 Independent Review Committee for Investment Funds is changed by this Document.
2. The following is added after section 2.5:
Commentary
1. For the purposes of preparing a report under this section, an "entity related to the manager" is as contemplated by section 1.3 of NI 81-107.
2. Paragraph (a) requires the manager to provide summary information regarding related party transaction reports required by securities legislation to be prepared by the fund manager. Paragraph (b) also requires stating that the reports are available at www.sedarplus.com.
3. Paragraph (b) recognizes that securities legislation mandates the filing of the particulars of only certain types of related party transactions, e.g. those carried out pursuant to subsections 6.2(2), 6.3(3), and 6.4(2) of NI 81-107, and paragraph 4.1(4)(c) of NI 81-102. For any other transaction involving the investment fund and an entity related to the manager that is not identified in any report referred to in paragraph (a), paragraph (c) requires the manager to provide a brief, general summary of such transactions..
3. This change becomes effective on April 22, 2026.
Issuer Name:
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Type |
Company |
Category of Registration |
Effective Date |
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New Registration |
SIGMA2 FAMILY OFFICE INC./SIGMA2 BUREAU FAMILIAL INC. |
Exempt Market Dealer |
March 6, 2026 |